Investment properties often contain tens of thousands of dollars' worth of tax deductions that can only be detected by a trained eye.
According to BMT Tax Depreciation, tax deductions can be concealed behind walls, in ceilings, under floors and on rooves. The combined value of these deductions can reach tens of thousands of dollars over their lifetimes and make a significant difference to a property investor's bottom line.
First, what is property depreciation?
Depreciation is the natural wear and tear of a property and the assets within it over time. The Australian Taxation Office allows owners of income-producing properties to claim this as a tax deduction. Depreciation is the second biggest tax deduction available to property investors after loan interest, and can be claimed for up to forty years.
Five hidden deductions easily missed in an investment property
1. Underfloor heating
Underfloor heating is commonly overlooked but can yield deductions of up to $10,000 for an average-sized house.
2. Re-stumping a home
Re-stumping, also known as re‑blocking, is re-setting (or replacing) the stumps on a house that use a stump subfloor. This is often necessary in older properties to replace damaged wood or due to soil movement. Re-stumping a house can produce a depreciation deduction in the range of $13,000.
3. Inconspicuous re-wiring and re‑plumbing
Inconspicuous re-wiring and re-plumbing may also be required for an older or damaged property. Improvements like this can fetch a total depreciation deduction of $16,000. Regardless of whether these improvements were completed by a previous owner, the current owner is still eligible to claim them.
4. Solar pool heating
Often tucked away on the roof, solar pool heating is commonly missed but can produce a total depreciation deduction of around $7,000.
5. Sewage treatment assets and tanks
While it's common for rural properties to have their own sewerage treatment assets and tanks, they can go unnoticed as they are unseen. Underground sewerage treatment tanks and piping can produce a total depreciation deduction of $11,600.
Almost every inch of a property is depreciable. A site inspection is required to ensure the maximum amount of depreciation is claimed, accurately.
Claiming maximised depreciation deductions is essential to boosting cash flow and ultimately optimising a property portfolio. Failing to claim these deductions can mean missing out on thousands of dollars annually.
BMT Tax Depreciation's expert staff conduct physical site inspections to accurately identify both the obvious and unseen depreciable items.
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Exclusive Offer
At Century 21, we want you to get the most from your investment property, so we've partnered with Australian experts in property tax depreciation, BMT Tax Depreciation to provide you with an exclusive discount offer.
BMT is offering a reduced fee of $715 inc GST on single residential tax depreciation schedules (normally $770).
To learn more about hidden deductions in an investment property call BMT on 1300 728 726 or visit BMT Tax Depreciation today to request a quote and enter promo code: CE11
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Note: Referral and affiliate fees are not sought or paid to anyone in the exchange of depreciation services. We receive no financial benefit for recommending BMT