Property investors have been urged to act fast before the end of the financial year and informed that those who wait risk losing thousands.
According to Raine & Horne executive chairman Angus Raine, investors who have recently settled on a property purchase should not wait until tax time to request a depreciation schedule, as they could risk missing out on thousands of dollars in immediate tax deductions.
“Investors often make the mistake of postponing a depreciation schedule until the following financial year,” he said.
“Often investors assume that because they’ve only owned the property for a short period of time, it isn’t worth claiming depreciation deductions that year, but this isn’t true.
“As soon as you settle on a property that you plan to use for investment purposes, seek out the advice of a depreciation specialist such as a quantity surveyor, who can use their knowledge of depreciation legislation to maximise deductions for partial-year periods as well.”
Mr Raine said investors can use a depreciation estimate before purchasing a property to plan for budgeting requirements, as deductions for wear and tear can assist with minimising the costs involved in owning an investment property.
CEO of surveying firm BMT Tax Depreciation Bradley Beer said a comprehensive depreciation schedule will incorporate certain methods to maximise deductions for a shorter period of ownership.
“Items valued less than $300 can be written off now, while assets which have an opening value less than $1,000 in the year of acquisition can be added to a low-value pool,” he said.
Research released by BMT found that new investors who have owned a property for just 20 days can still be eligible for up to $3,834 in tax deductions in the first financial year alone.
“By requesting a depreciation schedule as soon as a property settlement is finalised, investors can recoup some of the costs and provide an immediate boost to their cash flow,” Mr Beer said.