6 Tips for Commercial Investors at Tax Time [Pt 2]


IN THE FIRST Part of this series you discovered the first two tips to help you maximise the depreciation deductions that you can claim on your Commercial property.

Tax time is nearly here, take a look at the next four tips to make sure that you are claiming what you are entitled to. And not throwing money away.

3. Both Tenants and Owners Can to Claim Depreciation For Any Fit-out

Commercial tenants are able to claim depreciation for any fit-out they add to a property once their lease commences. This includes items such as desks, blinds, shelving, carpets, vinyl, fire fighting equipment and security systems.

If lease conditions mandate a tenant return the property to its original condition, they may also be able to claim a write-off for any remaining depreciable value available on scrapped assets.

This 100% deduction must be done in the same year as the item is removed from the property.

Any assets a tenant leaves behind after the tenancy has ended can also be claimed by the commercial property owner. Deductions for fit-outs can become very complicated, so it is important to consult with an expert.

4. Claim Right From The Start

Often property investors will wait until the next financial year to claim depreciation deductions if they have only just purchased a property.

However by doing so, they could miss out on valuable cash that can be particularly beneficial after out-laying substantial funds to secure the property.

Quantity Surveyors use legislative tools, for example immediate write-off and low-value pooling, to make partial year claims more beneficial to property owners.

It is worth consulting an expert to find out what claims are available.

Investors can also claim the tax depreciation schedule fee straight back in the same financial year if they arrange the schedule before the 30th of June.

5. You Can Adjust Previous Years’ Tax Returns

If a Commercial property investor has not been maximising their deductions and claiming depreciation, the previous two financial year’s tax returns can be amended.

A tax depreciation schedule can provide the details of any missed deductions for an investor’s Accountant to claim.

6. Get an Expert to Assess the Property and Perform a Site Inspection

To ensure that the correct deductions are claimed, make sure to speak with a specialist Quantity Surveyor. They are one of the few professionals recognised with the appropriate qualifications to estimate the construction costs of a building for depreciation purposes.

A Quantity Surveyor will inspect the property to make sure every plant and equipment asset is identified and that claims for fit-outs are correctly noted for both the building owner and the tenants claim.

A depreciation schedule will make the process easy for both the owners, tenants and their Accountants — to claim the maximum deductions.

BOTTOM LINE: There is a lot of things to consider when calculating the depreciation of a Commercial property. Hopefully, these 6 tips have helped you claim a little more.

Claiming depreciation on Commercial property investments can be tricky. Consulting a professional with industry experience will make the process a lot easier for you.


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