A little embarrassed to admit you’re unsure of or don’t understand what tax depreciation is? You’re not alone! Tax depreciation is often an overlooked yet interchangeable term used in property investments. Tax depreciation or property depreciation is simply the term given to explain the legal deductions claimed against the tax generated by your investment property. Investors of both commercial and residential properties are able to deduct a portion of the original capital investments or assets originally used in their property to make a profit.
These profits are made by necessary expenses spent on the investment property which include costs associated with renovations, furniture, interior design, and other necessary fittings. For property investors to be able to benefit from tax depreciation, they must seek to obtain a tax depreciation report. A tax depreciation report is mandatory for anyone seeking to benefit from property depreciation, and is easily carried out by Quantity Surveyors who analyze and take inventory of all tax deductible assets linked to your investment property.
For tax depreciation report in Adelaide, or a quantity surveyors report in Sydney, quotes or professional tax depreciation services can be accessed in the city or online via the local taxation office. A tax depreciation report is a detailed document or statement outlining the measure of the investment property’s depreciation status based on assets and original costs, and gives the property investor a detailed statement outlining the available figure that they’re able to claim each financial year.
Property investors are urged to look in to depreciation and to obtain a tax depreciation report in order to take advantage of their property’s rising value. The return of a property can vary, depending on the type of property invested and associated factors such as the original cost, age, appearance, and function. A basic example of the tax depreciation of a residential house purchased at $300 000 estimates a $7000 annual return with a cumulative depreciation of $30 000 from year 1 to 5.
Of course this is just a basic and rough example, but it highlights the advantage of researching and making use of the depreciation scheme offered to property investors. A professional tax depreciation report will be calculated by taking stock of an investor’s previous cost expenditures via two categories; “prime cost” and “diminishing value”. A quantity surveyor can help calculate both these categories and establish your annual depreciation value within 5 days from initial inspection.
You can even opt for quantity surveyors report in Gold Coast to know your property value. If you are curious to take advantage of tax depreciation or are still unsure of how it works (it is quite complex!) there are a number of resources online to help aid you; online quotes or request forms are also available. Alternatively, you can visit your nearest taxation office to start reaping the benefits of your investment property today.