How to Greatly Enhance Your Commercial Property Cash Flow

CLAIMING PROPERTY DEPRECIATION is paramount for commercial business owners. And yet, research suggests around 80% fail to maximise the deductions available to them.

As a result, they miss out on thousands of dollars.

With a commercial property, both owners and tenants are eligible to claim depreciation deductions simultaneously, so it’s important that both parties contact a specialist quantity surveyor to organise a tax depreciation schedule. 

A depreciation schedule will outline all available deductions over the life of the property. 

Under Tax Ruling 97/25, quantity surveyors like BMT Tax Depreciation are one of the only professions qualified to estimate construction costs for depreciation purposes.

Case Study: A $820,000 Commercial Office Building 

Justin’s company owns a commercial office building purchased for $820,000 and rented for $1,050 per week or $54,600 per annum. 

Expenses for the property including interest, rates, property management fees, repairs and maintenance total $57,088. 

Without depreciation, Justin’s company is experiencing a loss of $34 per week on the commercial office building.

Justin contacted BMT Tax Depreciation and found his business could claim $40,080 in depreciation deductions for the property in the first financial year alone. 

The following table shows Justin’s scenario before and after his company made the depreciation claim for the property.

By claiming depreciation, Justin improved the loss of $34 per week on the company’s property to a return of $198 per week. This improved the tax refund for the property by $12,024 in the first financial year.   

Maximise your tax return with property depreciation

As the case study shows, claiming property depreciation deductions can have a significant impact on a commercial business owner’s cash flow position. 

Bottom Line: A BMT Tax Depreciation Schedule details all available deductions over the lifetime of a property to ensure investors maximise their cash flow. Schedules have a one-off fee; and are totally tax deductible. 

Why Should You Invest in Commercial Property?

“This article by BMT Tax Depreciation is important
– because it simply confirms what I’ve conveyed in
a number of previous articles.”
   Chris Lang 

MANY INVESTORS tend to stay within their comfort zone when it comes to investing in property. And typically, this means they merely purchase residential houses and apartments. 

However, investing in commercial property has become more popular in recent times as investors look to diversify their portfolio and seek out affordable alternatives in a tightening residential market.

Unlike residential property, vacancy rates for commercial property are low and this combined with higher returns and depreciation benefits means there are several reasons to consider commercial properties as a potential investment.

We’ve taken a look at some reasons why commercial property is worth adding to your property portfolio. [Read more…]

The Era of Multi-storey Industrial Development

AS INDUSTRIAL land becomes scarce and more expensive, you will begin to see more multi-story warehouses emerge.

The first such major project is about to start in Revesby, in Sydney’s west. [Read more…]

Capital City Office Markets

THE CBD VACANCY rate for Sydney currently sits at 4.1%. And for Melbourne, it’s now at 3.8%.

As you would expect, overseas events have caused some hesitancy in the market. And the Sydney CBD can be rather sensitive to the global economy.

That said, recent reports show local business confidence growing – with stability appearing to return, after the recent election. [Read more…]

8 Key EOFY Tax Tips for Commercial Property

WITH TAX TIME upon us, you’re probably preparing to visit your accountant – to complete your annual income tax assessment.

Getting your tax in order can be an overwhelming task, but when you have a commercial investment property it can seem even more complex. [Read more…]

Your Limited Recourse Borrowing Arrangements

BORROWING THROUGH a Self Managed Super Fund (SMSF) to acquire commercial property has been a popular and attractive strategy over recent years – due to the tax benefits, and ability to minimise personal guarantees.  [Read more…]

Likely Impact of the US/China Trade War on Property

ACCORDING TO JP MORGAN, the expected trade war should only shave about 0.07% off Australia’s GDP over the next couple of years. [Read more…]

The Pendulum Has Swung

WHAT AN AMAZING election result … although, I had always felt it would be a lot closer than everyone thought. Now many people are now asking how the pollsters could have got it so wrong?

In actual fact, they weren’t that far out. Rather, it was more a heavy bias in media coverage which fanned the Labor fever.

So, How DID the Coalition Manage to Win?

[Read more…]

Scrapping Can Boost Your Commercial Property Return

COMMERCIAL PROPERTIES are often renewed and transformed to suit the ever-changing needs of their occupants. 

Scrapping occurs when removed assets and structural elements within a building have a remaining un-deducted value. At the time of removal, as the owner of the asset, you can claim that remaining value as an immediate deduction in that financial year. [Read more…]

A Quick Snapshot of the Commercial Property Market

RECENT RESEARCH conducted by CBRE has confirmed that investors preferred Melbourne over the other capital cities – based upon the strong fundamentals driving rental growth. [Read more…]

What Exactly is a Quantity Surveyor? 

THIS IS A QUESTION often asked by Investors.

A Quantity Surveyor (or QS) is a professional who specialises in estimating the value of construction costs and other assets. And Quantity Surveyors may get involved at various stages: prior to construction, during construction and post-construction.  [Read more…]