Investors are missing out on many financial opportunities and need to address this before tax seasons, according to a property expert group.
A lack of knowledge around tax depreciation schedules is causing many property owners to miss out on potential savings for their investments, according to Propell National Valuers.
The age of the property is one area of confusion that causes many to miss out, according to Propell National Valuers’ Isik Bozdag.
“There are a significant number of property owners and investors across Australia who are forfeiting thousands of dollars in potential tax deductions.
“The Australian Taxation Office stipulates that residential properties built after 18 July 1985 are eligible for depreciation on construction costs,” Mr Bozdag said.
“There is a misconception that only properties built after this date can be assessed for depreciation,” he said.
Investors who own properties from before 1985 can still claim depreciation benefits for major alterations and additions, including plant and equipment capital expenditure.
Older properties can also claim depreciation on a number of items, such as decks, extensions, carpets, window treatments, hot water systems, pools, air conditioning and hot water systems.
“A new property in its fifth year of ownership can generally offset income tax from $5,000 to $13,000.
“Improvements or additions to older properties will generate lower depreciation values but these are still worth claiming,” he said.
Propell National Valuers recommends that investors look to property experts that are registered to give tax advice, rather than just a standard accountant.