Pure Leasing News

Depreciation – are you missing out at tax time?

property-checklist1One of the main challenges for property investors in Australia is managing the cash flow from their investment property.  A tax depreciation schedule can assist in maximising the cash return from your property each financial year.

Whether your investment is a new build four-bedroom home, or an old one-bedroom unit – or anything in between – a depreciation schedule is a vital component of your overall investment strategy.

BMT – Australia’s largest tax depreciation company – has prepared a number of case studies to showcase the benefits of having a detailed tax depreciation schedule for any type of property.

Two of these case studies appear below, which illustrate how effective a tax depreciation schedule is, in maximising investment return.

At Pure Leasing Central, we’re more than happy to help you navigate this process so please don’t hesitate to call your Property Manager today!

Case Study 1 – a new three bedroom house purchased a year ago for $800,000

  • Property rented for $595 per week or $30,940 per annum
  • Expenses totalled $49,775 (interest, rates, management fees and maintenance)
  • At the end of the first year, the investor’s after tax outlay was $11,866, or $228 per week

After acquiring a professionally prepared tax depreciation schedule, it was established that a total of $18,700 in depreciation deductions was claimable in the first financial year alone.

Case Study 2 – a 1970s unit purchased a year ago for $400,000

  • Property rented for $440 per week or $22,880 per annum
  • Expenses totalled $30,269
  • At the end of the first year, the investor’s after tax outlay was $4,882, or $92 per week

A completed tax depreciation schedule resulted in $6,900 of depreciation deductions in the first year.

Source: bmtqs.com.au

 

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