"Maximizing Tax Benefits: Understanding Depreciation Claims for Older Properties"

Investing in property is a popular strategy for building wealth, and many investors are drawn to new properties because of the tax benefits they can claim at tax time. However, there's a valuable opportunity that often goes unnoticed: owners of older buildings can still claim significant depreciation benefits.

Depreciation Benefits for Older Properties:

1. Building Write-Off Allowance:

• The building write-off allowance isn't just for new properties. Owners of older buildings can claim the residual value of their property for up to forty years from the date of construction. This means you can still receive substantial deductions, making your investment worthwhile even if the property isn't brand new.

2. Depreciation on Fixtures and Fittings:

• Even if your property is more than 40 years old, you can claim depreciation on its fixtures and fittings. Items such as carpets, appliances, and lighting can be depreciated over their effective life, adding to your tax deductions.

3. Claiming Recent Renovations:

• You can also claim depreciation on any recent renovations, even if they were carried out by a previous owner. This includes upgrades and improvements that have been made to the property over time.

4. Maximizing Deductions:

• To ensure you are maximizing your deductions, it's essential to get a professional depreciation schedule prepared by a qualified quantity surveyor. They will inspect the property and provide a detailed report on the depreciable items, ensuring you claim every possible deduction.

5. Ongoing Benefits:

• Depreciation is a non-cash deduction, meaning you don’t have to spend money to claim it. This can significantly improve your cash flow by reducing your taxable income, giving you more funds to reinvest or use for other expenses.

Steps to Claiming Depreciation on an Older Property:

1. Get Professional Advice:

• Before purchasing an older property, seek professional advice on its depreciation potential. This can help you make an informed investment decision.

2. Hire a Qualified Quantity Surveyor:

• Engage a professional to prepare a depreciation schedule. This ensures accuracy and maximizes your claimable amount.

3. Keep Detailed Records:

• Maintain records of any renovations, upgrades, or improvements you make to the property. These can add to your depreciation claim.

4. Consult with Your Accountant:

• Work with your accountant to integrate the depreciation schedule into your tax returns effectively. They can provide advice tailored to your specific situation.

5. Stay Updated:

• Tax laws and depreciation rules can change, so it’s important to stay informed about the latest regulations. Your quantity surveyor or accountant can provide updates as needed.

Investing in an older property doesn't mean missing out on depreciation benefits. With the right approach and professional guidance, you can claim significant deductions, improving the return on your investment.

At Proactive Lending Solutions, we are dedicated to helping you navigate the complexities of property investment and maximize your financial benefits.

For more personalized assistance with property management, contact Shaun at Proactive Lending Solutions:

📞 Phone: 0424 513 740

📧 Email: info@proactivelending.com.au 

🌐 Website: www.proactivelending.com.au