In order to maximise the tax benefit your investment property will attract, you will require the services of a recognised Quantity Surveyor with specific property tax depreciation skills and experience. To ensure you claim all your entitled depreciation deductions a site inspection will need to be carried out as this will accurately identify all items of plant and equipment. These specific items attract higher depreciation rates than what is applied to the building. An over-capitalised property with more expensive fittings such as ducted air conditioning and stainless steel oven, cooktop and rangehood will have a higher depreciation claim than less expensive fittings such as split system air conditioning and
an upright stove.
Example: Tiles vs. Carpet
To obtain the highest depreciation claim when removing old carpet, should it be replaced with tiles or new carpet?
Note: This does not include scrapping of the original carpet.
Replacing the old carpet with new carpet in lieu of tiles will attract a higher depreciation rate of 20% using the diminishing value method, opposed to the tiles attracting a rate of only 2.5%. In both cases you will obtain depreciation but in this case it would be beneficial to the property owner to replace the old carpet with new carpet in order to obtain a higher return. BMT & ASSOC are specialists in maximising depreciation claims and can provide advice about any property scenario.
Article Provided by BMT & ASSOC Pty Ltd.
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1 response so far ↓
1 Mike Harmon // Apr 18, 2008 at 11:00 am
I came across your blog on Technorati. Nice site layout. I will stop by and read more soon.
Mike Harmon
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