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Investors overlooking depreciation opportunity

22 March 2013 Reporter

Investors may be unaware of depreciation claims that can be made against outdoor structures on their property, according to a tax expert.

“When it comes to claiming depreciation on investment properties, many investors are unaware of the deductions that are available on outdoor structures, fixtures and fittings,” said Bradley Beer, from BMT Tax Depreciation.

“Rather than ignoring the street appeal, investors can include items in the yard or outdoor area to help attract potential tenants. The investor can then maximise their deductions by claiming depreciation on the eligible items in the front yard, backyard and balconies of their properties.”

Mr Beer believes property managers can add value to their offering if they have a basic understanding of tax depreciation.


“Capital works allowance, also known as a building write-off, is based on the historical cost of a structure, excluding the cost of plant and non-eligible items," he explained.

“Outdoor structures that qualify for the capital works allowance include retaining walls, fencing, sleepers, concrete slabs, patios, clothes lines and in-ground pools.

“Some depreciable outdoor plant and equipment items commonly found outside a property include outdoor furniture, garden sheds, garden hoses, solar lights, pool filters and pumps, and garden watering systems.”

Mr Beer said investors should take special notice when old assets including retaining walls, garden sheds and driveways are removed and replaced during a renovation.

“They may be entitled to claim 100 per cent of the unclaimed value as a deduction. A specialist quantity surveyor is qualified to calculate values and construction costs of these items and can ensure that investors are not throwing dollars away,” he said.

Investors overlooking depreciation opportunity
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