Do you own your home and rent out a room or two to housemates?

If you’re claiming their rent as income then you could benefit from a tax depreciation schedule and claim some worthwhile deductions at tax time each year!

A tax depreciation schedule could save you thousands of dollars in the first year on a residential property being partially rented out to a housemate!

Tax depreciation schedules are not just for ‘traditional’ rental property owners. They can absolutely apply to and benefit home owners who are sharing their home with someone else who is paying them rent.

You’ll receive a tax depreciation schedule for your property and then you’re entitled to claim the deductions at whatever portion of the home is being rented out . For example if your housemate has sole use of a bedroom and a bathroom, and then shares common areas with you such as the kitchen, living room and garage then you could be claiming depreciation deductions on 30-50% of the home. 

But remember you need to be claiming your housemate’s rent as part of your income with the ATO for this to work for you. A casual / cash arrangement with a house mate does not qualify. 

As the property owner, if you don’t have a tax depreciation schedule completed for your share house, you are potentially missing out on thousands of dollars worth of legitimately claimable tax deductions available to you each year. Get in touch now to arrange your schedule!

Our client purchased a new home in Margaret River in 2015 for $315,000. She has been sharing the house with a couple of housemates since then, which has helped to pay down her mortgage. She has worked out she rents 56% of her home to the housemates (based on them occupying two bedrooms, a bathroom, a hallway, a garden shed and then a 50/50 split of shared common spaces). 
We surveyed her home in 2019 and our quantity surveyor prepared her schedule, backdating it to when she first started renting out the rooms in 2015, and she was eligible to claim over $5000 in deductions in the first few years of her schedule, and over $4000 in the next few years after that. Well worth the $495 fee she paid for the schedule – which is also tax deductible!

Nightingale Property Inspections can arrange ATO compliant Tax Depreciation Schedules for all Southwest residential property investors. 

One of our team will make an appointment with you to visit the property and measure all depreciable assets (this takes about an hour). This is a full site assessment – as preferred by the ATO, and the best way to maximise your returns. The data is then used by our quantity surveyor to prepare your schedule. The turn around time on the whole process is 1-2 weeks.

We partner with nationally recognised SJB Quantity Surveyors for finalising our tax depreciation schedules.

Your schedule will include allowances for capital works and plant and equipment as applicable, and is calculated using both the prime cost method and/or the diminishing value method:

Capital works allowance:

This is a deduction that is available for the structural element of a building, including all fixed and irremovable assets. These are commonly referred to as your building write offs. Examples are: wall construction, flooring, windows and doors. 

Plant and Equipment:

This is a deduction available for all of your removable assets which are described by the ATO as assets which depreciate at a faster rate than the building. Each one of these plant and equipment items has an effective lifespan, and the depreciation on that item is calculated according to ATO requirements. Not all properties actually qualify for this allowance and there are different percentages you can claim. Our quantity surveyors are experts in this field and will ensure you claim accurately and at the highest level that your property qualifies for. Examples are: furniture, ovens, carpets, curtains.

Apartment owners can even claim a portion of the allowances for the plant and equipment in the common areas of the strata!

Call / text now to make an appointment: 0438 905 819

Or email us at info@nightingalepropertyinspections.com.au

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