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Would you give away $10,000? Would you let a potential of lost income slip away?
Australian taxation statistics show that nearly 1 million income-declaring property investors in Australia fail to maximise on their investment property’s Capital Works and Allowances – otherwise known as Property Tax Depreciation.
The statistics are crazy – so many Aussie investors are not maximising their property tax depreciation claims, or not claiming at all. It’s crazy because as a property investor it’s potentially costing you tens of thousands in deductions each year.
There is an estimated 2.7 million income-declaring property investors in Australia. Of those, approximately only 1.275 million or 47% claim capital allowances against their investments – which is a staggering amount. What’s more astonishing is that the average capital allowance deduction being claimed is only $3,000.
NBtax by Napier & Blakeley has been producing Property Tax Depreciation reports since they were introduced as a deduction in 1985. In fact, Napier & Blakeley was the first quantity surveyor to offer the Australian property-investing public Property Tax Depreciation schedules. What makes this rather important is that over the 30 years of our operations, we have built up billions of dollars worth of property data.
It’s this data that tells us the Australian property-investor community is missing out. In our experience, the average claim for capital allowances should be somewhere around $8,000 and $12,000 – not $3,000.
Which begs the question, why are so many investors missing out?
All too often we see evidence that come tax time, we tend to prefer the easy way out. Let’s simply hand our tax return to our accountant and let them worry about it. Which is fine, of course, provided your accountant is seeking the right advice from a quantity surveyor who specialises in Property Tax Depreciation.
Or have you got a Property Tax Depreciation schedule from your real estate agent from when you purchased the property? If this is the case, again you are putting yourself at financial risk because it is very probable that this schedule will be nothing more than a sales estimate.
All Property Tax Depreciation schedules should be completed by a specialist in the field of quantity surveying and construction costing. Your property needs to be inspected so depreciable elements can be identified. The schedules are also calculated using specific information that can only be confirmed post-settlement, such as finalised purchase price, stamp duties, contact legal fees and land values.
Of course, according to ATO rulings, not all property investors can claim depreciation. For example, there are restrictions that depend on when your property was built. However, in this case, a specialised quantity surveyor is able to determine whether renovations have accrued, and estimate the cost of these renovations as these may enhance your property tax depreciation deductions. No matter what you might think, it’s always worth asking the questions and finding out the facts. Because doing so could make tax time far more enjoyable.
The message here is: come tax time, don’t become a frugal investor; become a smart property investor instead.
Cutting corners when it comes to property tax depreciation will, statistically, cost you thousands.
You can trust that when you come to NBtax by Napier & Blakeley, not only are we the country’s most experienced Property Tax Depreciation advisors, we’re also very good at what we do. We get a thrill out of ensuring you are able to cut your tax bill and enjoy your investment’s rewards.
Visit NBtax.com.au for more information
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.