Reduce Your Fit-out Costs Using Depreciation Deductions

STARTING A NEW business can be quite daunting, particularly if you're trying to do so within a strict budget.

On top of other initial start-up costs, such as purchasing stock or merchandise, arranging insurance, budgeting for staff overheads and (if you don't own the building) allocating funds to pay rent, there are often costs involved in installing assets to fit-out the new space before you can open the doors for business.

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Renovate and Flourish

MELBOURNE IS WELL KNOWN for its amazing selection of shopping, dining and entertainment. Consequently, more and more commercial property owners have joined the renovating bandwagon to produce popular hotspots for both local residents and those visiting.

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Depreciation: 3 Tips to Know

SURPRISINGLY, most Commercial property owners still remain unaware of their full depreciation entitlements.

In fact, around 80 per cent of commercial property owners don't claim depreciation; and therefore, miss out on thousands of dollars.

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Deductions If You Own Hotel or Motel Accommodation

A RECENT PROPERTY OUTLOOK by Colliers International and JLL Hotels & Hospitality Group has predicted that 2016 will be another robust year for Australian hotel and motel owners.

According to John Kenny, the Chief Executive Office of Colliers International Australian and New Zealand, strong consumer confidence is driving demand resulting in increased hotel real estate activity during 2015 and this is expected to continue in 2016.

"Confidence is having a positive impact across the property sector and this optimism is starting to flow through to several of our occupier markets, as businesses become more confident," he said.

As demand for hotel and motel properties grows, it is important that owners of these types of properties understand the deductions they are entitled to claim.

Often the owners of these types of properties fail to claim the full amount depreciation deductions they are entitled to.

By failing to take advantage of the maximum deductions available, owners of hotels and motels could potentially be missing out on thousands of dollars.

What is depreciation and how will it assist hotel and motel owners?

The Australian Taxation Office (ATO) allows the owners of income producing properties to claim depreciation deductions relating to the wear and tear of the building structure and the plant and equipment assets it contains.

You could be missing out on:

By claiming depreciation, hotel and motel owners essentially will reduce their taxable income, therefore they will pay less cash. What's more, the fee to obtain a tax depreciation schedule outlining all of the deductions available to be claimed is 100% tax deductible.


Tax Benefits for Collins & Pitt Street Farmers

MANY COMMERCIAL PROPERTY investors often own significant rural properties -- both for profit and pleasure. As such, we thought it important to ensure they're aware of the full tax benefits available.

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Depreciation Can Be Rather Accommodating

MORE AND MORE, Baby-Boomer investors are showing an interest in what is called "Traveller" accommodation.

Owners of income producing properties can generally claim both capital works and plant and equipment deductions. However when claiming for traveller accommodation, it's even more important to seek advice from a Quantity Surveyor.

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You Can Write-off Up to $20,000 Immediately

THESE TYPE OF DEDUCTIONS mean an immediate improvement in your profit.

As part of the May 2015 federal budget, the Australian Government announced that small businesses with an aggregated turnover of under $2 million would be entitled to claim a $20,000 instant asset write-off.

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“U Can’t Touch This”

MC HAMMER'S HIT SONG of the early 90's resonates when thinking about the main reasons people resist investing into their superannuation.

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New Tax Ruling 2015/2

THE AUSTRALIAN TAXATION OFFICE has released a new tax ruling effective from the 1st of July 2015.

Replacing Tax Ruling 2014/4, Tax Ruling 2015/2 outlines the effective lives for all assets when calculating depreciation deductions for plant and equipment items.

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Claiming Depreciation on Fitouts … Some Rules to Note


COMMERCIAL PROPERTY OWNERS and their tenants can both reduce fitout costs for any business by claiming depreciation deductions.

As deductions can be claimed simultaneously by both owners and tenants, a few simple rules must be considered when a Quantity Surveyor prepares a tax depreciation schedule for a commercial property:

Commercial tenants are able to claim depreciation for any fitout they add once their lease starts. At the same time, commercial property owners can claim deductions for any of the plant and equipment items originally found in the property.

If a tenant’s lease demands that the property must be returned to its original condition, the tenant can write-off the remaining depreciable value of removed assets in the financial year of their removal.

If a tenant vacates a building and does not remove the fitout, the owner may still be able to claim the remaining depreciation for these items.

Small business owners should also be aware of the recent changes outlined in the federal budget and understand how these changes will affect their claims.

The following rules apply

      1. If a business has an aggregated turnover beneath $2 million per year, items added after 7:30pm on budget night (12th of May 2015) worth $20,000 or less will entitle their owner to an immediate write-off in the year of their purchase. This rule will apply until the 30th of June 2017.
      2. For small business owners, assets which cost $1,000 or less installed between the 1st of January 2015 and the 12th of May can still be written off immediately. Assets above the $1,000 threshold purchased for small businesses between these dates can be added to a low-value pool and depreciated at an increased rate of 15 per cent in the first year and 30 per cent for each year after.
      3. Assets purchased between the 1st of July 2012 and the 31st of December 2013 for small businesses which cost $6,500 or less are still eligible for an immediate write-off under previous depreciation legislation rules. Most other assets purchased during this time frame can still be pooled at a rate of 30 per cent.
      4. For businesses with an aggregated turnover of over $2 million, although the measures implemented during the May 2015 federal budget will not apply, there are still substantial deductions available. Items worth $300 or less can still be applied as an immediate write-off and assets which cost $1,000 or less are still eligible to be added to a low-value pool.

Assets not within these thresholds will continue to depreciate based on their individual effective life, as determined?by the ATO.

Bottom Line: Commercial property owners and tenants who would like further information about how any of the recent federal budget rules will affect their depreciation claim can seek expert advice from a specialist Quantity Surveyor such as BMT Tax Depreciation.

BMT also provide depreciation schedules to help outline all of the deductions available for both commercial property owners and their tenants to lodge their claim when completing their annual income tax return.


Be Fully Aware of Your Commercial Property Deductions

WITH THE RECENT federal government announcement that small business owners are entitled to claim an immediate write-off for items worth up to $20,000, many commercial property owners may be wondering about what deductions they are entitled to. [Read more…]