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Tax time: How understanding depreciation laws can help you win more listings

16 May 2019 Tim Neary

Property professionals should regularly update their property depreciation knowledge to help with sales or rental listings and strengthen their trusted adviser status, according to one tax expert.

BMT Tax Depreciation said that tax depreciation is often a key factor in the value an investor places on a property, as it can directly increase their cash flow.

CEO Bradley Beer said that it is important to have an up-to-date understanding of depreciation, especially given the recent changes to depreciation laws.

“In late 2017, the government made the largest changes to tax depreciation laws since the 1980s and many investors may be unaware of these changes. 

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“A property professional doesn’t have to be an expert in depreciation, but a basic understanding of the subject can help an investor make a more informed decision.”

Mr Beer said there are cases where properties hold “hundreds of thousands of dollars” of tax deductions over their effective lives.

“By informing buyers of the lucrative deductions available and encouraging them to seek an expert assessment, an agent can increase the prospects of a sale while clearly demonstrating a holistic understanding of property investment from different angles.

“Property managers can also benefit from informing new landlords about the deductions they can claim via free depreciation estimates. This additional information can give them an edge over their competition.”

Mr Beer said there are many cases where this has been of financial benefit.

“In the 2017–2018 financial year, BMT found an average of $8,212 in deductions for all residential investment properties it had assessed. With such significant deductions available for thousands of properties across the country, savvy property professionals are wise to introduce the subject.”

Tax time: How understanding depreciation laws can help you win more listings
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