Depreciation Myths – Part 5: “I have held my property for years so there’s no point claiming depreciation now”

Following on from Depreciation Myths – Part 4: “My Accountant will look after my tax depreciation”, the very common question of: “I have held my property for years so there is no point claiming depreciation now”. 

I want to start this conversation off very simply with the fact that the structure of your investment property (IP) has an effective life of 40 years! If you have owned your investment property which was built post September 1987 then it is very likely you are missing out on thousands of dollars worth of possible tax deductions.

Even if your IP was built prior to September 1987 your property would have had renovations undertaken, even if 10 years ago (see my article on depreciating renovations http://www.linkedin.com/pulse/depreciation-myths-part-3-renovations-were-previous-zac-gleeson?trk=prof-post), there will still be significant value left to depreciate.

Another tip which could save you thousands is that your Accountant can help you claim tax depreciation retrospectively, amending up to the past two financial year tax returns making the most of your depreciation deductions which you may have lost through not claiming. This is completely legitimate and the Australian Taxation Office actually encourages you, even if you haven’t in the past, claim depreciation deductions by amending your past tax returns (TD 2005/47).

I would like to encourage you to contact us, obligation free, to discuss your IP and the benefit tax depreciation can have on your cash flow and your overall return on your Investment. Importantly, remember we guarantee the value of our service.

For more information please don’t hesitate to email me on [email protected], visit gqs.com.au or call 1300 290 235 to speak to a tax specialist today!