Property investors missing out on big tax cuts, analysis shows

These projections are based on estimations and analysis of data from 1,000 investors in the MC Quantity Surveyors database.

For managing director Mike Mortlock, the results were “an extraordinary outcome”.

“If you extrapolate our findings across the nation’s total investor population, Aussie landlords are potentially short $2.886 billion on their claimable losses,” Mr Mortlock said.

By not having a depreciation schedule, the analysis found investors lost an average of 3.58 years of deductions.

“When these results are replicated across the nation’s total investor population, there’s potentially 140,525 Aussies who’re missing out on deductions,” Mr Mortlock said.

“Given the average unclaimed amount was $20,537, this equates to a total potential loss of $2,885,967,347 in missed depreciation write-offs.

“We even had one investor who waited almost 18 years to do a schedule and lost $41,000 in tax breaks as a result.”

Why do Australians skip over schedules?

Often, there is a lack of knowledge about depreciation and how it can impact an investor’s tax return, according to Mr Mortlock. 

“Tax can be a complex subject for most people, and some property investors remain under-informed about the benefits depreciation can bring at the end of the financial year,” he said.

“The longer you put off ordering a depreciation schedule on your property, the more you lose in benefits because you can only back-claim two years of depreciable items under normal circumstances.”

“Australian investors already contribute their fair share through income tax, GST, stamp duty as well as Capital Gains Tax and land tax, so any opportunity to reduce the impost should be taken.”