Why tax depreciation schedules might be worth the investment for landlords

4 June 2022

The end of financial year is almost upon us and now is the time for landlords to consider whether a tax depreciation schedule might be warranted for your investment property.

Mont Property Business Development Manager Nicholas Cole said depreciation was one of the biggest tax deductions available to both residential and commercial property investors and could significantly increase their cash returns.

A depreciation schedule tracks the depreciation, or natural wear and tear, of a property over time and is only available to investors as a tax deduction.

The customised report, which is tailored to your specific property and considers its age and features, sets out the depreciation sum that can be claimed over time.

Mr Cole said a depreciation schedule ensured landlords were maximising their cash returns from their investment properties; and minimised the chance of forgetting to claim certain deductions.

“At Mont, we recommend our landlord clients have a depreciation schedule completed and we can certainly point them in the right direction if this is something they would like to have drawn up,” he said.

“Whenever the owners have a depreciation schedule, they tend to get a good tax return because they depreciate the asset over a period of time.”

Mr Cole said while there was some outlay for the initial tax depreciation schedule, the financial returns could be significant and well worth the time and investment.

“Tax depreciation schedules usually cost a few hundred dollars but can be invaluable at the end of the financial year, saving time and money,” he said.

“If you’re a landlord and haven’t yet got a depreciation schedule, now is the time to consider commissioning an expert to put one together for your property.

“The end of financial year is less than a month away so it is an opportune time. What’s more, the one-off schedule is 100% tax deductible and can be claimed in your 2021/2022 tax return.”

For more information, contact the property management experts at Mont or visit the Australian Taxation Office for more tax time tips.

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