Property investors can earn more from their holiday home

Property investors often purchase holiday homes with more than one motivation. 

They hope not only to gain an income from the higher weekly rental yields that a holiday home may offer, but also picture taking advantage of their investment by spending some of their holiday’s swimming in the backyard pool or taking in the ocean views from an apartment balcony.

Before making a decision to dive in and purchase any investment property, investors should seek advice from relevant professionals such as a property manager, an accountant, a financial advisor and a quantity surveyor. 

According to Bradley Beer, the Chief Executive Officer of BMT Tax Depreciation, research shows that 80 per cent of investors are not maximising the deductions they can claim from their investment property.

“Holiday rental property owners often assume that because they are personally using their property, depreciation cannot be claimed. This can lead to investors missing out on thousands of dollars in lost deductions annually,” said Mr Beer.

The Australian Taxation Office allows investors to claim deductions for the wear and tear of the structure of the building and wear and tear on new plant and equipment assets purchased for any income producing property, including holiday rentals.

Investors are encouraged to seek advice from a specialist quantity surveyor when purchasing a holiday home. A quantity surveyor can provide an estimate of the deductions that will become available to assist with any purchase decisions and a full tax depreciation schedule on settlement that outlines all of the depreciation deductions the owner can claim for the life of the property (forty years) for the owners Accountant.

“It’s extremely important in the case of holiday homes that investors arrange a depreciation schedule as often the owner will only plan to rent the property for part of the year. A specialist quantity surveyor can provide a tax depreciation schedule which is based on the portion of a year a property is available for rent,” said Mr Beer.

“The owner of the property can still claim depreciation for any periods of time it is untenanted so long as it is available for rent. However, depreciation cannot be claimed during the portion of the year the property is used for personal use,” said Mr Beer.

Investors considering purchasing a holiday home who would like more information on the depreciation deductions that will become available can speak with one of the expert staff at BMT Tax Depreciation on 1300 728 726 or Request a Quote. 

Article provided by BMT Tax Depreciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.