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Follow the steps below to ensure your tax depreciation schedule is right the first time around.
Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may be entitled to claim the remaining depreciable value for the items being removed as a tax deduction in that financial year.
Arranging a tax depreciation schedule before completing renovations will save you time and money when making a claim. In case of an audit by the Australian Taxation Office (ATO), a valuation of all items in a property, as well as adequate photographic records is required.
A second schedule is prepared after completion of the renovation, identifying the value of all new plant and equipment and capital expenditure within the property. The adjustments will be made to your tax depreciation schedule for a small adjustment fee and should not cost you as much as the initial tax depreciation schedule. The new schedule will outline all the depreciation claims available for the life of the property (forty years).
Established in 1997, BMT Tax Depreciation is a leading provider of ATO compliant and comprehensive tax depreciation schedules. The qualified team at BMT meticulously prepare and customise each and every depreciation schedule, ensuring that owners maximise the deductions they are entitled to.
Scrapping is a complicated process that requires the expertise of a specialist Quantity Surveyor in conjunction with an Accountant. By requesting a tax depreciation schedule you know you’re not going to miss out on anything and your Accountant will love you for it.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. To find out more about property depreciation, please call 1300 728 726 for obligation free advice on residential property tax depreciation.
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Always speak to Quantity Surveyor to ensure that you gain the maximum taxable benefits available on your investment property.Learn More