Property managers that keep up to speed with information that can help investors are more likely to retain their existing clients, and win more referrals. Here are five lucrative tax items that investors can claim as expenses that are not commonly understood.
BMT Tax Depreciation says that analysis of its client reports for the last financial year showed that the company had discovered slightly over $1 billion worth of legitimate tax deductions from the 10 most high-value items found in clients’ investment properties.
CEO Bradley Beer said that “by far” the most lucrative item for investors was carpet.
“If you have carpet in your residential investment property, you are likely sitting on a goldmine of tax deductions.
“We found nearly $180 million worth of carpet-related tax deductions in residential properties last financial year that can be claimed over 10 years, the item’s effective life, according to the ATO.”
Mr Beer said that split system ($146 million) and standalone air conditioners ($122 million) were the second and third most lucrative items for investors in the 2017–18 financial year.
He said that blinds and lifts rounded out the top five, with the BMT team finding $116 million worth of legitimate tax deductions for each item over their effective lives.
“I can say with a degree of certainty that if [investors] have purchased a new apartment and it has carpet, blinds, air-conditioning and a lift as part of the building, [they] are going to be pleasantly surprised by the value of tax deductions [they] are entitled to moving forward.”
Mr Beer said that ovens ($95 million), floating timber floors ($89 million), hot water systems ($81 million), dishwashers ($75 million) and cooktops ($56 million) rounded out the top 10.
He also said that last year the federal government passed some of the most significant changes to tax depreciation laws since the 1980s.
“While the changes exclude some investors from claiming certain items moving forward, there are still significant deductions available to be claimed for all owners of income-producing properties.”