Melbourne Property Depreciation

Property Depreciation

If you take a look at how the millionaires of the world made their money, you will find that a good number of them did it with real estate. There is no denying that there is money to be made by investing in property. Some people are content with getting a place at a good price and flipping it for a profit, while others like to renovate a place and rent it out to create a monthly income. Both options have their risks, but some of that can be averted by knowing how the tax laws can be on your side. Taking the time to make all the renovations and repairs that are required mean that you can take advantage of a property tax depreciation schedule.

PropertyHow this all works in Melbourne is that a quantity surveyor comes out to your property to place a depreciation value against equipment and other parts of the building. This is especially good for those who buy businesses that have a lot of machinery and equipment that may need to be worked on over time. The depreciation amount can then be applied against your taxable income so that you get some of the money you spent back in your pocket. What you need to be aware of is that there is a cutoff date in the tax depreciation schedule, and those differ depending on the building type and when it was constructed. A good quantity surveyor can make you aware of the dates.

Many people make the mistake of thinking that they can hire a tax accountant to take care of all this, but that is in fact not the case. It is only a quantity surveyor who can make decisions based on construction costs and how they affect the amount that you have to pay in tax. They will work hard to make sure that you get the maximum savings possible. The surveyor will go over your property with a fine tooth comb to ensure that you get all the money that you are entitled to. The only way that can happen is if you hire an experienced quantity surveyor, which means looking for a company that is a member of the Australian Institute of Quantity Surveyors (AIQS). This is something that should be made visible on their website. If you don’t see that logo, consider it to be a red flag.

As touched on earlier, there are a number of factors that go into how much money you will save due to property depreciation. You have to look at the type of property, commercial or residential, as well as its age, size, and location. As much as you can expect to have some serious savings through depreciation, you also need to be completely aware that the filing of the depreciation has to be done on the schedule laid out by the tax office. Again, a good quantity surveyor will help you keep all of that together and get you the biggest bang for your buck in the process.

Matthew Stanely, managing director at Asset Economics