Do you own a rental property in Margaret River or surrounds?
A house, apartment or holiday rental?
Did you know that as a residential property investor you can get even more value out of your property at tax time with a depreciation schedule?
You could save upwards of $10,000 in the first full financial year with a tax depreciation schedule.
Nightingale Property Inspections offers a tax depreciation schedule service between April and June each year on new and established residential investment properties in the following areas:
Surveys carried out between April and June each year:
Margaret River
Cowaramup
Witchcliffe
Rosa Brook
Prevelly / Gnarabup
This service includes an on-site survey (takes about 30-45 minutes) carried out by a Nightingale Property Inspections team member to record the depreciating assets, and then your tax depreciation schedule is prepared by a quantity surveyor, within 2 weeks after the survey.
We partner with SJB Quantity Surveyors to provide ATO compliant tax depreciation schedules ready to hand straight to your accountant at tax time.
Why do I need a tax depreciation schedule?
A tax depreciation schedule will ensure that you’re maximising the cash return from your investment property. If you do not have a tax depreciation schedule you’re potentially missing out on thousands of dollars’ worth of legitimately claimable tax deductions available to you each year.
Your schedule will include allowances for capital works and plant and equipment where applicable, and is calculated using both the prime cost method and the diminishing value method. You only need to do it once and that schedule provides your accountant with the figures they can use to make tax deductions on your property for up to 40 years.
Even the cost of the schedule is fully tax deductible for you as the investor and is normally returned 5-10 fold in the first year alone! Have a chat to your accountant or financial advisor – you’ll likely be surprised at what a ‘no-brainer’ it is to have a schedule prepared for your investment property!
What assets can be depreciated on a rental property?
This includes the ‘fixed’, irremovable and structural parts of a building. These are commonly referred to as your building write-offs.
Examples are: wall construction, hard flooring, windows, doors, kitchen and bathroom cabinetry, sinks and basins, showers, built in wardrobes.
Depreciation on capital works can be claimed on residential properties built after September 1987.
Apartment owners can also claim a portion of the capital allowances in the common areas of the strata, where applicable.
For older properties, the cost of any major renovations and building additions completed after these dates (by you or a previous owner) may also qualify for inclusion in your schedule.
Plant and equipment items can only be depreciated if:
- They were acquired by you prior to May 2017 (the ATO’s cut off date) and if the property was also being leased prior to May 2017.
OR
- They were purchased as brand new by you at any time (even after May 2017) and while the property was available for lease. Note that these items cannot be depreciated if they were obtained second hand from the previous owner of the property.
Plant and Equipment are all of your ‘removable’ assets as well as electrical and motorised appliances. They are described by the ATO as assets which depreciate at a faster rate than the building.
Examples are: hot water systems, carpets, clip-lock or vinyl flooring, curtains and blinds, ovens, stoves and range-hoods, ventilation fans, light shades and furniture.
Not all plant and equipment will be included in your schedule, depending on when you acquired the property and when it was first rented out, however our team will ensure these items are included wherever possible.
Examples on plant & equipment depreciation (the May 2017 cut-off is defined further by the ATO):
- You purchased the property in June 2017. A hot water system was installed by the previous owners in April 2017. This hot water system is now considered ‘second-hand’ and will not qualify regardless of when the property was first leased.
- You purchased the property in June 2017, and advertised the place for lease straight away. You installed a new hot water system in July 2017 so this HWS will qualify.
- You purchased the property in June 2017. You then lived in it yourself until June 2018 and you bought, installed and used a new hot water system during that time. You then started leasing the property in July 2018. The hot water system will not qualify for depreciation as the property was not being leased when the equipment was purchased.
- You purchased the property in April 2017 and it was leased straight away. All plant & equipment that came with the property when you purchased it is considered ‘second hand’ – but because of the date that you bought the property (prior to May 2017) and you have leased it the whole time, these items will all qualify for depreciation
How do I book and what's involved?
Simply fill out the form below to express your interest in this service. We will get back to you with a quote and further info, and if you’re happy to proceed we’ll keep your details and contact you to arrange the service sometime between April and June.