news

Renovators overlook depreciation benefits

By Stefanie Garber

Landlords who rush into renovations may be missing out on thousands of dollars worth of tax write-offs, according to the director of a quantity surveying firm.

Tyron Hyde from Washington Brown said investors frequently fail to consider depreciation before doing structural renovations on their rental properties.

“If they're going to renovate a property that has been income-producing prior to renovating it, they might want to consider getting a quantity surveyor to see if there is any value they can attach to what they're about to throw out,” he said.

If a property was constructed after 16 September 1987, investors may be able to claim depreciation on the structure as a tax deduction spread out over 40 years.

Before tearing out old kitchens or bathrooms, Mr Hyde suggests commissioning a “scrapping report” to see if any of the older fittings have residual depreciation benefits.

“Say you bought a property late last year that has a tenant in place. The property was built in 1990 and you remove the kitchen, which originally cost $10,000,” he said.

In 2014, this 24 year-old kitchen would still offer 16 years worth of depreciation benefits.

“You might be able to get $4,000 as an immediate tax deduction for the removal of the kitchen,” he said.

Moreover, the renovation would "re-set the clock", so that landlords can continue to claim depreciation on the cost of the new kitchen over the next 40 years, Mr Hyde explained.

Renovators overlook depreciation benefits
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%