Property tax depreciation: The second biggest tax deduction for property investors

Did you know that depreciation stands as the second most significant tax deduction for property investors, trailing only behind interest expenses? Despite its potential to significantly enhance cash flow and overall returns, a considerable number of property investors fail to capitalise on this valuable tax deduction.

What is property depreciation?

Property depreciation refers to the wear and tear of a property and the assets within it over time. The Australian Taxation Office (ATO) permits owners of income-generating properties to claim this depreciation as a tax deduction.

One of the key benefits of depreciation is that investors don't have to spend money out of pocket to claim it. Unlike other deductions that require direct expenditure, such as repairs, maintenance and advertising, depreciation allows investors to recoup a portion of their property's value simply by virtue of ownership.

How will depreciation help an investor?

Despite its advantages, depreciation is often underutilised by property investors. As a result, they may be leaving money unclaimed by missing out on valuable tax savings.

By claiming depreciation deductions, investors can substantially reduce their taxable income, lowering their overall tax liability and increasing cash flow. As property depreciation experts BMT can uncover every deduction you are entitled to claim and find residential property investors an average of almost $9,000 in deductions in the first full financial year alone.

How can a property investor gain this tax advantage?

BMT Tax Depreciation gather essential information required for creating a property depreciation schedule. A specialist then conducts an onsite property inspection to identify and record all depreciable assets on your property. This information is then reported back to the BMT office. Subsequently, a tax depreciation schedule is generated, which your accountant utilises to claim your property depreciation deductions. This tax depreciation schedule lasts for up to 40 years or the lifetime of the property. Additionally, BMT offers the convenience of forwarding your schedule directly to your H&R Block accountant, saving you time and effort.

H&R Block clients can have BMT Tax Depreciation schedules prepared for a reduced fee of $705 incl. GST for residential properties. Normal fee $770 incl. GST. This fee is 100 per cent tax deductible and H&R Block receives no financial gain from recommending BMT Tax Depreciation.

To take advantage of the discounted fee as an H&R Block client, contact BMT Tax Depreciation on 1300 728 726 or Request a Quote.

Disclaimer: This article is for educational purposes only and is not intended as financial, legal or tax advice. Professional advice should be sought before any action is taken.