Tax Depreciation Services Melbourne and Nationwide
Tax Depreciation
Buildings decline in value because of 'wear and tear’, like any other commodities. This decline in value, also known as property 'depreciation', is regarded as a loss in your investment cashflow. With our tax depreciation services in Melbourne and Nationwide, property investors can put this lost money back into their pocket at tax time.
Depreciation is a significant component of any tax return that is associated with income-producing property. The primary goal of our tax depreciation services is to maximise the return from your investment property within the boundaries of relevant legislation.
Property depreciation is not a once-off deduction from your taxable income. It is an ongoing deduction that occurs every year from the completion of building works. Property depreciation can last for 40 years or 25 years, depending on when the property was constructed.
Qualification
At ATR Building Consulting, we can prepare a property depreciation report in Melbourne and nationwide. Our depreciation schedule always includes both Diminishing Value and Prime Cost methods for depreciating assets, which allows you to maximize your tax return based on your investment time frame.
Our fee for tax depreciation is immediately 100% tax-deductible.
Our money-back guarantee ensures your depreciation for the first full year will be twice as much as our fee, or your property depreciation report is free!
ATR Building Consulting is the premier tax depreciation quantity surveyor in Melbourne and Nationwide. You can trust our experts to maximize your return on investment properties. Basically, all investment properties attract depreciation. With our tax depreciation quantity surveyor, investors can benefit from property depreciation in the following scenarios:
- New Buildings
We will estimate the construction cost of the building and assess all relevant equipment in line with ATO requirements. New buildings attract huge depreciation in the first five to ten years, which may turn your cash flow into positive gearing.
- Older Buildings
We use our historical data and costing system to provide construction costs for existing buildings. We can also assess the opening value of plant and equipment based on current market condition and purchase prices. Most older buildings still attract generous tax depreciation.
- Renovation of old buildings
Any renovation or extension can be claimed as a deduction, even it is conducted by a previous owner. We also provide pre-renovation inspections to determine 'write off' residual value before existing assets are removed.
- off-the-plan / Pre-purchase
A tax depreciation estimate provides potential buyers with the depreciation range of a particular property, which may help the buyer forecast cash flow of the investment.
Eligibility
The depreciation can only be claimed from the properties that produce income. The legal owner of an investment property can claim tax depreciation in accordance with ATO tax ruling Nationwide. In cases of joint legal ownership, each person can claim deductions based on their share in the asset (for example, based on their share of the cost of the asset, and according to their use of the asset).
Methods
Tax Depreciation comprises two types of deductions: Capital Allowances & Depreciating Assets.
Capital Allowances refers to building structure and improvements. Capital works depreciate on 2.5% or 4% per year depending on the year of construction and the type of building. Click here for a time chart for different types of buildings.
Depreciation of assets (plant & equipment) is based on the curtain depreciating rate determined by their effective life, which is regulated and reviewed by the ATO.
Residential buildings constructed prior to 18 July 1985 are no longer eligible for capital allowances deduction, however, plant and equipment and all improvements after 27 February 1992 still attract substantial deductions.
The chart below illustrates a basic tax depreciation structure:
Examples
The amount of depreciation available to you highly depends on the type and age of your building. Based on the diminishing value method, median deductions for some typical new buildings in average Melbourne suburbs are shown below:
|
Building Type | Purchase Price | First Full Year Depreciation | First 5 Year Depreciation |
| 1 Bed Apartment | $350,000 | $8,000 | $35,000 |
| 2 Bed Apartment | $500,000 | $12,000 | $55,000 |
| 3 Bed Apartment | $650,000 | $14,000 | $65,000 |
| Townhouse | $500,000 | $12,000 | $55,000 |
| House | $700,000 | $16,000 | $75,000 |
| Warehouse | $1,800,000 | $80,000 | $360,000 |