Did you know, you can claim deductions in the form of property depreciation for an industrial investment property?
Legislation set by the Australian Taxation Office (ATO) allows the owners of any income producing property to claim depreciation.
Depreciation deductions are due to the decline of a building and apply to both the structure of the building (via a capital works deduction) and to any plant and equipment assets contained within the property.
An investor’s depreciation benefits will vary depending on the type of building, its age, its use, its size and its fit out. In commercial and industrial buildings a tenant is also entitled to claim depreciation for any fit out they install in the property once their lease starts. For these reasons it is very important to consult with an expert to find out what deductions are available.
For buildings of an industrial or a commercial nature, a Quantity Surveyor who specialises in depreciation will need to perform a site inspection of the property to ascertain what depreciation deductions the owner or the tenants of the property can claim.
A Quantity Surveyor will take measurements as well as photographs of assets and note any critical information about the assets and structure of the property. This information is then used to put together a tax depreciation schedule for the owner, the tenants or both parties and their Accountant/s to process their claim when they complete their annual income tax assessment.
Real deductions, real returns – making a real difference for you
The table below provides an estimate of the depreciation deductions available for a variety of industrial property types.
* The depreciation deductions in this example have been calculated using the diminishing value method of depreciation.
Depreciation deductions can make a huge difference to the cash flow of any investment property. If you have any questions or concerns regarding this article, please call CAAA today on 02 9299 1200 or click Email Firm below to arrange a complimentary discussion with one of our expert advisors.