Property investors lose out on $17.5 billion in unclaimed tax depreciation
Australian investors could be claiming an extra $5,000 per property at tax time by following a few simple steps, according to a leading industry expert.
Mark Kilroy, director of Koste tax depreciation quantity surveying company, says the Australian Tax Office (ATO) is sitting on $17.5 billion in unclaimed tax depreciation entitlements.
“Only 40 per cent of investors are taking advantage of property tax depreciation schedules which average claims of just over $3,000 – thousands lower than the claimable average of $8,000,” says Mr Kilroy.
“Investors are simply unaware of the benefits and the thousands of dollars they could be claiming.
“They’re losing money because they’re probably self-assessing claims, or they’ve employed unqualified persons to carry out the claim.”
Mr Kilroy says quantity surveyors who prepare tax depreciation schedules should actually visit the property rather than base the report on a telephone conversation with the client.
“I always recommend using a qualified quantity surveyor to carry out the site survey and compile the report – this enables them to provide the client with detailed and accurate schedules which in turn maximises the claimable amount,” says Mr Kilroy.
Investor’s depreciation benefits vary depending on the type of building, its age, fit out and use, and ATO legislation states that the owner of a residential investment property can only claim capital works deductions if construction commenced after 18 July 1985.
However, depreciation of plant and equipment is not limited by age, rather it is the condition and the quality of each item which contributes to the depreciable amount.
“If your property is eligible for deductions and you've never claimed depreciation, you could be entitled to a substantial back claim,” says Mr Kilroy.
“For example, one of my clients who’d never claimed depreciation on 1990s built $450,000 property claimed upward of $14,500 in the first year and an average of $8,000 every year thereafter.
“Koste quantity surveyors identify and value capital and structural works carried out post original construction, and possess detailed knowledge of the current legislation surrounding plant and equipment to maximise tax depreciation for clients.”
As identified by the ATO from 1 March 2010, all companies preparing tax depreciation schedules must be registered tax agents.
Mr Kilroy says all Koste surveyors are registered tax agents and specialise in tax depreciation schedules for both residential and commercial clients Australia wide.
Koste Tax DeprceiationKoste tax depreciation quantity surveyors specialise in the preparation of inspected tax depreciation schedules for residential, commercial and industrial clients nationally. Their experienced quantity surveyors and tax registered agents have a wealth of experience, having advised some of Australia’s leading property investment companies and superannuation funds.
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