Introduction

For property investors, tax depreciation is a powerful tool to improve cash flow and reduce tax liability. This article explores strategies to maximize your tax depreciation claims while staying compliant with Australian tax regulations.

Hire a Qualified Quantity Surveyor

Quantity surveyors are licensed professionals specializing in construction cost estimation and tax depreciation schedules. Engaging a certified quantity surveyor ensures your depreciation schedule is accurate and compliant with ATO requirements.

Understand Legislative Changes

The ATO periodically updates tax laws, impacting depreciation claims. For instance, changes introduced in 2017 restricted plant and equipment depreciation claims for second-hand properties. Staying informed about such updates is crucial for maximizing deductions.

Focus on Capital Works

Even if plant and equipment depreciation is restricted, capital works deductions remain available for eligible properties. Ensure your depreciation schedule accounts for all eligible structural components, including:

• Foundations

• Walls and roofing

• Windows and plumbing systems

Dont Overlook Renovations

If youve renovated your property, you can claim depreciation on the updated elements, provided you have documentation of the costs. This includes structural changes and new installations.

Take Advantage of Immediate Write-Offs

The ATO allows small business entities and property investors to immediately write off low-value assets under specific thresholds. Grouping such assets appropriately can maximize deductions in the year of purchase.

Conclusion

Maximizing tax depreciation requires proactive planning, expert assistance, and an understanding of current legislation. By employing these strategies, Australian property investors can significantly enhance their financial outcomes.