Learn how to stay under the ATO’s radar by watching this video
A depreciation schedule on your investment property can generate significant tax savings – as long as it has been complied correctly. In my experience there are three areas the ATO tends to target come tax time. One of them is whether you’ve claimed repairs and maintenance correctly. This can be tricky.
Your property must also be income producing in order to claim depreciation.
For instance, if you make a repair while living in the property, then move out 2 months later, you can’t claim it.
The third area of concern is in relation to the building allowance.
The building allowance refers to the wear and tear on the actual building – things like bricks and concrete. You have to make sure they’re being claimed in the right category and not alongside items like carpets and blinds, which are considered plant and equipment.
The building depreciation allowance must also be claimed on construction costs – NOT the purchase price of your property. A mistake I see time and time again.
And that’s where we can help. Quantity Surveyors are recognised by the Australian Tax Office as the right people to estimate these costs. NOT valuers nor real estate agents.
So there you have it. To stay under the ATO’s radar, make sure:
Your repairs are being claimed correctly The property is an income producing asset The building allowance is based on the construction cost. And most importantly, use a qualified quantity surveyor.
If you need a depreciation schedule for your investment property – get a quote here or work out how much you can save using our free calculator.
Project description: Site 3, Sydney Olympic Park, NSW
This development comprised a 25-storey tower, housing two retail tenancies and 267 apartments over four basements. A two-storey commercial pod, consisting of six commercial tenancies, including associated site works, also formed part of the development.
Washington Brown provided pre-contract cost planning services to the developer, as well as a full cost management auditing service to the financier during the construction phase.
We also provided monthly contractor payment recommendations and reporting to the financier, along with variation assessment, cash flow analysis and contractor reviews.
Washington Brown worked to ensure the builders maintained the lump sum contract price and the financier’s/developer’s interests were maintained at all times.
Whether you’re building a block of residential units, a commercial or business centre, a high-rise tower or developing a subdivision, it is a must that you are in control of the project cost. We all know that effective cost management is critical to a project’s success.
Washington Brown has extensive experience in all major sectors of the property industry over the last 30 years. This expertise and knowledge is fundamental when assisting our clients in completing their projects on time and on budget.
We have been involved in a wide range of development projects where we have acted as the cost controller on behalf of lending institutions. Our best-practice cost planning service ensures you get accurate cost and construction information for every stage of your project.
We offer specialist advice in the following nine broad areas:
Financial auditing of projects
Construction-contract review and assessment
Risk identification and management
Tender review and selection.
Washington Brown’s ongoing project monitoring, coupled with our robust reporting systems, helps us detect issues early, giving you time to address them quickly and in the most cost-effective way.
We can monitor, analyse and report on:
We have developed a cost report for the project monitoring that easily identifies the current project financial status, cash flow analysis, variation assessment and risks.
If you need help minimising the risk of overruns on your next construction project – talk to our construction estimating team today.
This blog is an extract from CLAIM IT! – grab your copy now!