How we saved $30,000 in depreciation!
Washington Brown recently moved head office and what an eye opener it was. Not only are we now located in the big smoke (Sydney CBD) as opposed to Sydney's North Shore, we had an opportunity to put our knowledge of tax law, tax depreciation and construction costs to the test.
Our new office required a substantial fit-out before we could move in and on completion our builder gave us a tax invoice for $200K worth of work carried out.
Now, if I was a regular investor with no insider knowledge of tax law, I probably would have handed this invoice to my accountant and claimed the work back at 2.5% per annum, the rate you can claim for capital works deductions. This equates to a $5000 claim in the first year.
But we knew if we got our builder to break down the costs relative to the appropriate trades, such as carpet, air-conditioning, flooring, workstations etc, and then apportioned part of the builder's costs (supervision, management etc) to each individual trade - we would be able to maximise the claim by placing specific costs against items that depreciate faster.
Our first-year claim was closer to $35,000, that's a saving of $30,000!
This exercise proved to us just how important it is to ensure our clients are properly informed of their options when moving office or buying new premises.
Are you thinking of moving? Contact us to talk about how to get the maximum from capital works deductions.