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Claim depreciation for older commercial investment properties

One of the main reasons commercial investors continually fail to take advantage of the depreciation deductions available from their property, is because they believe their property is too old to warrant making a claim.

According to Bradley Beer, the Managing Director of BMT Tax Depreciation, this myth needs to be dispelled.

“Often investors make the mistake of thinking they will not receive deductions for an older property due to the date restrictions the Australian Taxation Office (ATO) place on claiming the available capital works allowance. The reality is that any property, no matter how old the building is, will entitle its owner to valuable deductions in the form of depreciation. This is because the owner is also entitled to claim depreciation for the plant and equipment assets contained within the property,” said Brad.

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Hidden Cash

HiddenCash2

What may commercial properties be hiding from tenants?

Property depreciation is mostly claimed by the owner of an income-producing property. It is for this reason that many commercial tenants often miss out on the hidden cash available to them through depreciation.

Commercial tenants can claim depreciation deductions based on any fit-out or plant and equipment assets that they add to the property.

Tenants can claim depreciation deductions on all fit-outs while the owner of the commercial property is simultaneously able to claim a deduction on the building and any plant and equipment items that they own.

Dependent upon lease conditions, if a tenant vacates a building and does not remove the fit-out from the building at the end of their lease, the owner of the property may be able to claim any remaining depreciation. However if a tenant’s lease stipulates that the property must be returned to its original condition at the end of the lease, then the tenant can benefit from claiming any remaining depreciation on the items removed and scrapped.

It is important to consult a qualified Quantity Surveyor when dealing with commercial property depreciation to ensure that not only are maximum deductions achieved but that they are claimed correctly.

For more information on commercial property depreciation, visit BMT Tax Depreciation’s new commercial depreciation page by clicking here.

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Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT Tax Depreciation.  Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.

 

Commercial Property Depreciation

Five Facts For Commercial Investment Property Owners

What commercial property investors should consider

Commercial investment property owners are often unaware they are entitled to make a claim for property depreciation. According to Bradley Beer, the Managing Director of BMT Tax Depreciation, around 80 per cent of commercial property owners don’t take advantage of property depreciation and therefore miss out on thousands of dollars.

“Claiming depreciation is paramount for commercial property investors. A depreciation claim can provide the difference in income for owners to turn a negative cash-flow property into an investment with a positive cash-flow,” said Bradley.

To help commercial properties owners earn more from their property, here are five facts about tax depreciation to assist them in the lead up to the end of financial year.

1. What is depreciation and what can be claimed?

The Australian Taxation Office (ATO) requires investors to report any income earned from a commercial property as part of preparing their income tax assessment. Commercial investment property owners are entitled to claim depreciation. Depreciation is a deduction available due to the wear and tear of a buildings structure (capital works deduction) and its fixtures and fittings (plant and equipment items) over time. It is considered a non-cash deduction, meaning investors do not need to spend any money to be able to claim it.

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