Dreaming of a villa in Tuscany or a loft in New York—and turning it into a savvy investment? Good news: you might be able to claim depreciation on that overseas property and still get more bang for your buck.
Just like Australian real estate, an overseas property can offer you valuable tax deductions—if you know how to claim them correctly that is. From structural elements to plant and equipment, understanding the rules can make a huge difference to your bottom line.
In this blog, we break down exactly what you can claim, key dates to know, and how to get the most out of your overseas investment.
One area many investors overlook? Depreciation. Yes, overseas properties can offer valuable depreciation deductions that may put money back in your pocket — if you know how to claim them correctly.
Fancy a villa in Tuscany? What about a Condo in LA or Loft apartment in New York? I do!
But can I claim depreciation on this property… The short answer is yes!
What’s the difference in claiming depreciation on an overseas property?
The main difference, however, is in claiming the building allowance – that’s the wear and tear on structural elements of the property like bricks and concrete.
With Australian properties, you can claim 2.5% of these construction costs per annum, as long as the property was built after July 1985. The rate for overseas properties is the same – but the date is different. Construction of an overseas property must have commenced after 1990.
So if you want to maximise your depreciation benefits on an overseas property, look for a newer property built in the last decade or two. Internal items like carpets, ovens, lights and blinds – can also be depreciated, as you would with an Australian property but have to brand new. This is often referred to as plant and equipment.
The best way to calculate how much you can claim on your investment property is by using our depreciation calculator:
An excellent place to start your research is on the ATO’s website. You can download a publication called Tax-Smart Investing: What Australians Investing in Overseas property Need to know.
Do your homework before buying
Like any property investment, you’ll need to do your homework, research the local market, and find out about rental yields and occupancy rates. But the best thing is – this can all be done online these days.
The main barrier to depreciating an overseas property is working out the construction costs and the expense of flying a quantity surveyor overseas.
Washington Brown has several affiliations around the world. We regularly inspect properties in London… New Zealand… I even did an inspection in Koh Samui (Thailand) recently.
We can help you claim the maximum eligible deductions if you have an investment property located overseas. Request a free quote from us to help you get started:
Own property abroad? Start claiming today!
How can I start saving today?
If you need a depreciation schedule for your investment property – get a quote here or let us prepare an estimate of the likely deductions available to you – just submit your property for a free review here. Start claiming depreciation on your overseas investment property today!
The main barrier to depreciating an overseas property is working out the construction costs and the expense of flying a quantity surveyor overseas to prepare your depreciation report. Washington Brown has several affiliations worldwide, and we regularly inspect properties in London, New Zealand, Asia, Europe and the States.
Click the link if you need a quote for an Overseas Depreciation Quote