* Please note: This article only applies to houses for investment purposes
Did you know that with your rental property, you can save thousands of tax dollars annually from a tax depreciation schedule report of your rental property? If you do not claim these depreciation items, you lose a chance to get back a legitimate tax amount.
Some people lodge their taxes themselves and usually deduct only 2.5% of the total building (construction) costs for your rental property. But in fact, you can deduct many other items and the amount of tax claimed back might (99.9%) be more by using the tax depreciation report prepared by Qualified Quantity Surveyors (QS). Here are the reasons why you should book a meeting with a QS now to make a depreciation report:
- QS has a full checklist of all items that can be depreciated: They know the depreciated rate of these items and how long you can depreciate. Therefore, you can make sure that nothing is missed and everything is claimed at the maximum rate.
- With the new purchase, a report from QS helps to maximize your taxes. Why? As a buyer, you might not have details of all the building (construction) invoices, QS will help you to calculate the maximum depreciation for all items even without invoices.
- Best strategy: A good QS can help you change the way you calculate and allocate the depreciation to help you maximize your tax claims over the long term. Of course, once you decide to use a method, you must stick to that method.
- If you purchase an established house and you are not sure if it is worth depreciating, you can be consulted with QS. There are QS companies (such as Northwind Quantity Surveyor) that can test and assure that they can provide you worthy depreciation reports. They guarantee if your tax depreciation deduction for the first year is not triple their fee, they will refund your money.
- The depreciation report only needs to be done once by QS and can be used for 40 years.
People also question if a tax accountant can generate this depreciation report? The answer will be: No. Because to make this depreciation report, it is necessary to check the building (construction) items of the house, and this is not the expertise of a tax accountant. Therefore, according to ATO, a QS is the most appropriate and is recognized for tax depreciation reporting.
Disclaimer: All information in this article of Trusted Finance is for informative purposes only. Trusted Finance will not be responsible for individual results applied to the above information without consulting with a related professional.