In this month’s QS Corner - When everything old is new again!
As you probably know by now, property investors can no longer claim depreciation on second-hand depreciable assets like ovens, dishwashers etc.
So even if the property you buy is only one year old, the new depreciation laws apply.
So, from a tax point of view, you might be better off buying an older unit and upgrading the depreciable assets.
Why? Because if you do renovate the property and replace the old items with brand new ones - you can still claim the depreciation on those items.
And if there is value attached to the existing items you remove, you can claim that as a capital loss.
A small cosmetic renovation, of say $20k-$30k, yields the greatest upswing not only in rental increases but in tax depreciation claims as well.
You could be looking at a deduction somewhere between $7k-$10k in the first year alone!
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Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost.
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
Read more Expert Advice articles by Tyron
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
