New figures suggest that up to 80 per cent of investors are failing to claim tax depreciation on their properties.
Every four out of five investors are missing out on thousands of dollars’ worth of potential tax savings according to Raine & Horne and BMT Tax Depreciation.
CEO of Raine & Horne Angus Raine urged property investors to be pro-active about determining depreciation on rental properties.
“Many investors do not understand how to properly claim depreciation on residential properties”, Mr Raine said.
“Anecdotal evidence from our network of offices and the experience of BMT Tax Depreciation shows around four out of five landlords overlook this entirely legitimate tax deduction, thereby paying far more in tax than necessary.”
Investors can claim building depreciation on a broad range of rental property items including built-in kitchen cupboards, clotheslines, door and window fittings, driveways, garages, fences, retaining walls, sinks, basins, baths and toilet bowls.
“They can also claim depreciation on carpets, vinyl, and linoleum, as well as hot water systems, heaters, solar panels and air conditioning units,” Mr Raine added.
Brad Beer, managing director of BMT believes investors are missing out on considerable savings.
“Up to 60 per cent of a new property’s purchase price is potentially tax-deductible over the life of the property,” said Mr Beer.
“But for established properties it is also possible to back date any missed depreciation costs by two years.”