Earn
Property investors miss out on key tax benefits
With the end of the financial year fast approaching, property investors are being urged to look into depreciation or risk losing thousands.
Property investors miss out on key tax benefits
With the end of the financial year fast approaching, property investors are being urged to look into depreciation or risk losing thousands.
Research released by accounting firm BMT found that 12 per cent of property owners fail to claim depreciation schedules as part of their tax deduction, despite it being the second largest tax benefit for property owners.
Depreciation is the natural wear and tear of property and assets over time. It is the second-largest tax deduction available for investment property owners after loan interest, yet tens of thousands of investors are neglecting to claim depreciation to its full potential.
“In the last three years, more than 25,000 people who have come to BMT for a tax depreciation schedule have been missing out on claiming any depreciation in previous financial years,” Bradley Beer, BMT chief executive officer, revealed.
Mr Beer noted that property depreciation isn’t the same as other tax deductions. Investors don’t need to spend any cash to claim it, which is why it’s easily missed. And people don’t realise it can be claimed for up to 40 years.
“If an investor buys a new four-bedroom house for $750,000, they could expect a first-year deduction of over $16,000, while the cumulative five-year deductions would be around $67,500,” Mr Beer told investors.
The CEO continued to explain that investors regardless of the size of their portfolio can still claim thousands in depreciation deductions.
“A second-hand, two-bedroom unit purchased for $550,000 can still result in a first-year depreciation deduction of over $6,500 and cumulative five-year deductions of over $27,000.”
Mr Beer said that investors who have not been claiming depreciation could still claw back some missed dollars.
“It’s quite straightforward to amend two previous years’ tax returns with our schedules, but anything beyond this can get complex and come under tax commissioner scrutiny. So, it’s best to get on top of it early,” said Mr Beer.
“Claiming depreciation can be the difference between a negative and positive cash flow. We see it help investors build equity and grow their portfolios throughout their investing journey,” he concluded.
About the author
About the author
Tax refund
The ATO is targeting side hustlers: Here’s what you need to know
If you don’t keep on top of what your side hustle means for your tax obligations, you’re asking for trouble. ...Read more
Tax refund
Why your tax return could be better than usual this year
If there was ever a year when it was worth doing your taxes on time, it’s this one. ...Read more
Tax refund
ATO issues tax tips for first-time share and ETF investors
The ATO has offered a helping hand to first-time ETF investors facing the burden of lodging their tax returns. ...Read more
Tax refund
The tax trick that property investors need to get their renovation deductions in order
Knowing the difference between renovations and repairs can mean the difference between a timely tax return and an audit by the ATO. ...Read more
Tax refund
What makes a good tax?
With the economy going through an uneven recovery, an industry expert has highlighted the current failures of the tax system and what makes a good tax. ...Read more
Tax refund
Aussies more conservative with tax returns amid COVID pandemic
Over a quarter of Australians are looking to pay off outstanding bills with their tax returns, according to new research. ...Read more
Tax refund
$5.3bn in tax returns tipped to support economic recovery
Less than 30 days into the new financial year, the ATO has revealed that over 2 million tax refunds have been processed. ...Read more
Tax refund
How expanding the GST could net Australia $500m at the 2032 Olympics
The right GST mix could see Australia pocket an additional $500 million from international travellers when it hosts the Olympics in 2032, new figures show. ...Read more
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
What does the NSW regional permit mean for property investors? Who really wins from the BHP-Woodside merger?
Listen now
The sea and tree-change norm; Square’s acquisition of Afterpay; Why you should think twice before turning to TikTok for advice
Listen now
Tax refund
The ATO is targeting side hustlers: Here’s what you need to know
If you don’t keep on top of what your side hustle means for your tax obligations, you’re asking for trouble. ...Read more
Tax refund
Why your tax return could be better than usual this year
If there was ever a year when it was worth doing your taxes on time, it’s this one. ...Read more
Tax refund
ATO issues tax tips for first-time share and ETF investors
The ATO has offered a helping hand to first-time ETF investors facing the burden of lodging their tax returns. ...Read more
Tax refund
The tax trick that property investors need to get their renovation deductions in order
Knowing the difference between renovations and repairs can mean the difference between a timely tax return and an audit by the ATO. ...Read more
Tax refund
What makes a good tax?
With the economy going through an uneven recovery, an industry expert has highlighted the current failures of the tax system and what makes a good tax. ...Read more
Tax refund
Aussies more conservative with tax returns amid COVID pandemic
Over a quarter of Australians are looking to pay off outstanding bills with their tax returns, according to new research. ...Read more
Tax refund
$5.3bn in tax returns tipped to support economic recovery
Less than 30 days into the new financial year, the ATO has revealed that over 2 million tax refunds have been processed. ...Read more
Tax refund
How expanding the GST could net Australia $500m at the 2032 Olympics
The right GST mix could see Australia pocket an additional $500 million from international travellers when it hosts the Olympics in 2032, new figures show. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
