Items you might not know you can depreciate

As we enter a new tax year, owners of investment properties in Australia can significantly boost their cash flow by claiming these tax deductions on a large number of various household items through depreciation benefits.

It may surprise many property investors that even garden gnomes can be depreciated for tax purposes.

Under taxation ruling TR2006/15 garden gnomes can be depreciated for tax purposes as plant over their economic life.
Many investors in Australia totally underestimate the number of items that can be depreciated for tax purposes and this comprehensive list can even include garden gnomes, cubby houses and if they own an apartment, then common areas such as car parking and recreational facilities.

The tax benefits associated with negative gearing can be very signification with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property.  In some cases these tax benefits can total $300,000 based on a purchase price of $500,000.

To qualify for these legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of the property and then compile a depreciation report based on this inspection.

Estimates of tax depreciation benefits for an investment property made from an office desk will not be accepted by the ATO.

Depreciation is a complex area of taxation that requires a professional company to undertake a depreciation report because of constant changes in rules.

The ATO is now taking a more aggressive approach to tax deductions made by residential investors and has asked a large number to provide more details about their claims relating to property investment.

Property investors should check that the company undertaking their tax depreciation schedule is a member of the The Australian Institute of Quantity Surveyors (AIQS).