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Tips on Depreciation

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1. Claim depreciation to maximise returns

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Any investment property that generates income may be eligible for thousands of dollars in depreciation deductions. In fact,most investors can claim an average of $5,000 - $10,000 in deductions in the first full financial year alone. Property depreciation is often missed as it is a non-cash deduction; ie the investor does not need to spend money in order to claim it.

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2. Order a tax depreciation schedule

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A BMT Tax Depreciation Schedule outlines all the deductions you can claim for your property. It lasts for 40 years and the fee for preparing it is 100 per cent tax deductible.

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3. Amend previous tax returns

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Investors can amend two previous tax returns to recoup any missed deductions.

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4. Ensure you use a specialist Quantity Surveyor to prepare your tax depreciation schedule

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Quantity Surveyors are one of the few professionals recognised by the ATO to have the appropriate construction costing skills to estimate building costs for depreciation. However, only a tax depreciation specialist such as BMT can be relied on to maintain detailed knowledge of all current ATO Tax Rulings relating to depreciation.

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5. Claim for renovations and improvements

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For a residential property, investors can claim capital works deductions at a rate of 2.5 per cent per year for a maximum of forty years from the property’s completion date.

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