Property News & Hotspots

Property Depreciation and Tax Benefits

By Landsdale Property Group on July 7, 2017 in Property News | comments
One of the main challenges for property investors Australia-wide is managing the cash flow from their investment property. A tax depreciation schedule, prepared by a specialist Quantity Surveyor, can assist to maximise the cash return from an investment property each financial year. BMT is one of the quantity surveyors that we recommend to our clients.

Take a look at some of their property investor case studies:

Case Study 1: A house purchased for $300,000

The figures:

  • Michael purchased a ten year old house for $300,000 one year ago.His property was rented for $310 per week or $16,120 per annum.
  • Expenses for Michael’s property including interest, rates, management fees and maintenance totalled to $20,090 for the year.
  • By claiming depreciation, BMT Tax Depreciation was able to turn Michael’s negative cash flow position into a positive one, saving him $2,775 in the first year of owning the property.

Case Study 2: A new unit purchased 1 year ago for $450,000

The figures:

  • Donna purchased a two bedroom unit one year ago for $450,000.
  • The property was rented for $465 per week with a total income of $24,180 per annum.
  • Expenses for the property including interest, rates and management fees totalled to $33,735.After calling BMT Tax Depreciation,

Donna found that she would be able to claim $12,800 in depreciation deductions in the first year.

Case Study 3: An old townhouse purchased for $690,000

The figures:

  • Eighteen months ago, Mary purchased a townhouse for $690,000 originally constructed in 1995.
  • Her property was rented for $595 per week for a total rental income of $30,940 per annum.
  • Expenses for Mary’s property including interest, rates, management fees and maintenance costs totalled to $45,795.
  • As a successful property manager, Mary was aware of the benefits of tax depreciation, however she was unsure of the deductions she would be entitled to claim due to the age of the building and the plant and equipment assets.
  • Mary contacted BMT Tax Depreciation to discuss the details of her property and was pleasantly surprised that she was able to claim $7,200 in depreciation deductions in the first full financial year alone.

For more case study examples, and to calculate your property's potential depreciation, have a look at https://www.bmtqs.com.au/property-investor-case-studies/