Depreciation www.renos.com.au | firstname.lastname@example.org | 1300 550 656
What is Depreciation? • Hidden cash flow for property investors • As buildings get older items wear out – they go down in value • You can get a tax benefit for this! • You can’t claim depreciation for your PPOR
What is Depreciation? Must be carried out by a Quantity Surveyor (QS) then applied by your accountant.
Pre Construction Construction Post Construction What is a Quantity Surveyor? A specialist in building measurement and cost estimating
Tax Depreciation Estimates • Gives prospective purchasers/investors an accurate figure of potential tax depreciation • Helps to calculate the financial performance of a property investment
What is Depreciation? Myth: You can only get depreciation out of new or near new buildings. WRONG!
Depreciation • There is no age restriction on Plant and Equipment. • So when you buy an old property these effectively start a new life. • This is why old buildings still have depreciation benefits.
Depreciation Depreciation may include: • The Building and built surrounds (i.e. carport) • Plant and equipment (i.e. hot water system) • Furniture • Where in a unit block with Body Corp, common areas
Depreciation Example 1Furnished Unit Block $385,856 over 9 years. They even depreciate the egg cups!
Depreciation Example 2Brand New Block of 10 x 1 Bed Units $81,000 first year!!!
Depreciation Example 3Old Block of 2 Flats Scrapping value $15,000
Depreciation Example 4Old Furniture for the Dump $40k to Vinnies
Depreciation Example 5Old House Even a 30 year old building has $54,178 of deductions!
Summary • Depreciation is a paper loss only • You get a tax break for this! • MUST be done by a QS, NOT accountant • Applies to old and new • Can be back dated 2 years • If you are an investor and haven’t got a depreciation schedule, we’ve just made you money!
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