Investors across the country are turning to property to decrease their taxable income while at the same time creating wealth - so what do you need to know to take advantage of tax concessions?
Blogger: Paul Bennion, Managing Director, DEPPRO tax depreciation specialists
The latest Government Finance Statistics for the December 2013 quarter show that all levels of Government in Australia (including Federal, State and Local Government) collected $109.7 billion in taxes during this three month period.
This compares to $94.4 billion collected in taxes during the September 2013 quarter, representing an increase of 16.2% in taxes collected over the quarter.
These figures show that on average all levels of Government throughout Australia are now collecting more than $9 billion in taxes every week.
With the new financial year fast approaching, these taxation figures highlight the importance for all Australian to claim their legitimate tax allowances.
To reduce their taxable income, more Australians are taking advantage of legitimate tax benefits which flow from investing in property such as depreciation.
For example, just one tax depreciation report for an investment property can generate thousands of dollars in potential savings in tax each year
Over the coming weeks, a large number of investors will be making decisions to buy investment properties throughout Australia to coincide with the start of the new financial year.
This is particularly the case with high income earners such as people employed in the mining sector who want to reduce their taxable income yet at the same time invest in property to create wealth.
If you buy an investment property, it is important to understand that you have to undertake a tax depreciation schedule as soon as possible after settlement so that it complies with ATO guidelines.
The initial cost of the tax depreciation report – which is tax deductible, clients can achieve thousands of dollars in tax benefits each year from their investment by legitimately claiming their full depreciation allowances.
Even an older style home can also qualify for substantial tax depreciation benefits if a depreciation schedule is undertaken around the time of settlement.
To protect their interests and ensure that they select a company that is fully compliant with ATO rulings, property investors should select a company that is a member of The Australian Institute of Quantity Surveyors (AIQS).