Investors missing out on tax write-offs
Landlords may be losing thousands of dollars in depreciation benefits by overlooking smaller items, a quantity surveying firm has warned.
According to new research conducted by BMT, shower curtains, smoke alarms, lawnmowers, roller-door motors, microwaves and garbage bins are among the dozens of minor objects in the average rental home that landlords routinely forget to claim depreciation on.
BMT also revealed that figuring in these assets can increase the cash flow generated by a property by around 15 per cent.
“Property investors tend to focus on the larger-ticket depreciation items available, such as the structure of the house and large plant items in the house,” said BMT managing director Brad Beer.
“However, it’s often the smaller items which can make a significant difference to an investor’s cash flow.”
Mr Beer said investors can often name a few depreciable items, such as carpets, hot water systems and light fittings.
“But a range of less obvious items, such as garbage bins, exhaust fans or smoke alarms, are often overlooked,” he says.
BMT conducted their survey among their 190 staff Australia-wide, asking them which items their clients found “very surprising” when told they could be depreciated or which they’d missed out in their DIY filing of depreciable items.
The company has more than 8,000 regular referrers to their business, including property professionals and accountants who recommend their services to property investors.
They found the most common assets never claimed for were items like garden sheds, which have on average a depreciable value – the purchase price of the item minus its salvage value which can then be claimed for over its useful life – of around $855 and ceiling fans ($265) right down to smaller expenses like shower curtains ($30).
Other frequently missed assets included solar-powered generating systems ($5,500), automatic window shutters ($800) and intercom systems ($745). A full list of assets is below.
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Top assets on which tax depreciation is rarely claimed |
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|
Asset |
Depreciable Value
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Exhaust fans |
$125.00 |
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Bathroom accessories – freestanding |
$110.00 |
|
Shower curtains |
$30.00 |
|
Door closers |
$185.00 |
|
Smoke alarms |
$145.00 |
|
Garden sheds – freestanding |
$855.00 |
|
Ceiling fans |
$265.00 |
|
Clocks electric |
$20.00 |
|
Garbage bins |
$250.00 |
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Light fittings non-hardwired |
$80.00 |
|
Mirrors – freestanding |
$185.00 |
|
Radios |
$55.00 |
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Rugs |
$245.00 |
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Solar oowered generating system assets |
$5,500.00 |
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Window shutters automatic |
$800.00 |
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Spa bath pumps |
$425.00 |
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Tennis court nets |
$550.00 |
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Garbage disposal units |
$455.00 |
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Water filters, electrical |
$195.00 |
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Garden lights, solar |
$20.00 |
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Tennis court maintenance equipment |
$900.00 |
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Closed circuit television system |
$1,550.00 |
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Water feature pumps |
$225.00 |
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Garden watering systems |
$558.00 |
|
Intercom system |
$745.00 |
Source: BMT Tax Depreciation