Maximising Tax Deductions on Rental Properties

Maximising Tax Deductions on Rental Properties

When purchasing a rental property many clients are unaware that they could maximise their deductions by checking one item – DEPRECIATION.

Depreciation/capital works deduction is a claim on the wear and tear on both the building, fixtures and fittings within.  This deduction is available for both residential and commercial properties. The amount deductible will depend upon the age of the building and fit out.

On purchasing a property a Quantity Surveyor can inspect the property and provide a report showing the owner all amounts available for deduction.  This will maximise deductions and increase property returns, the report also meets the Australian Taxation office substantiation requirements.

Once the report is obtained it specifies deductions for depreciation/capital works that are available for up to 40 years following construction.  Quantity Surveyor fees are also tax deductible and can be recouped within the first years of the depreciation claim.

Properties constructed and or renovated/refurbished after 18 July 1985 (residential) and 20 July 1982 (commercial) will be eligible for a capital works deduction (depreciation on building).  Also capital works deductions can be claimed on any structural works after February 1992, e.g. fencing, paving, and sheds to name a few.

Maximising tax deductions and rental property returns goes along way to giving the best returns from your investment properties.  Advice on taxation and rental properties or a recommendation for a Quantity Surveyor is available from Charman Partners to assist you.


Submitted by Joanne Barbanti

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