Property investors are being urged to be proactive in working out the depreciation on their rental properties before the end of the financial year.
The call comes after Raine&Horne and quantity surveying firm BMT Tax Depreciation found 80 per cent of investors failed to claim depreciation and were subsequently losing out on thousands of dollars.
According to BMT, an investor could claim cumulative depreciation of approximately $50,000 in the first five years on a new two-bedroom unit costing $400,000.
CEO of Raine&Horne Angus Raine said investors could claim depreciation on a broad range of rental property issues, including built-in kitchen cupboards, clothes lines, door and window fittings, driveways and garages, fences and retaining walls and sinks, baths and toilets bowls.
“They can also claim depreciation on carpets, vinyl, and linoleum, as well as hot water systems, heaters, solar panels and air conditioning units," he said.
“Many also forget that blinds, curtains and light fittings are depreciable items, as are security systems.”
Apartment investors could also be able to claim depreciation on common property such as lifts, and even gym equipment.
Depreciation claims are applicable to both new and old properties, according to BMT Tax Depreciation director, Bradley Beer.
“Up to 60 per cent of a new property’s purchase price is potentially tax deductible over the life of the property,” he said.
Landlords could potentially claim between 10 to 40 per cent annually, depending on depreciable items and in many cases, 2.5 per cent of the building costs could be claimed each year for 40 years.
“Seeking professional advice for depreciation on new and old investment properties is crucial. Preparing depreciation reports is a complex process, but a specialist will ensure your claim is maximised every time,” said Mr Beer.