Maximise your SMSF property investment with a tax depreciation schedule

If you’re managing your own super-fund, and property is part of your investment strategy, you want to ensure you do everything possible to maximise the investment.

Are you aware of the significant financial gains a tax depreciation schedule can produce for you?

Just like any other property investor, SMSF managers who invest in real estate can claim a deduction for the wear and tear on a building’s structure,any structural improvements that you make, and for the depreciation of all plant and equipment items inside and outside the property.

So, what exactly is tax depreciation?

The Australian Tax Office (ATO) allows for the cost of construction and fit out of investment properties to be claimed back over time, against the income earned on a property. No matter the property type, a tax depreciation schedule details the eligible amounts that can be claimed in a tax return. A tax depreciation schedule helps your accountant or tax agent understand the deductions you can claim on your investment property over a 40-year period.

What type of properties are eligible?

There are some limitations for eligibility, set by the ATO. For instance, residential property must have been built after 1985, or have had significant renovations or refurbishment to be eligible for a tax depreciation schedule.

Investors who purchase a new residential,commercial, industrial, or agricultural property can claim depreciation for structural improvements and for plant and equipment.

Investors cannot claim on pre-existing plant and equipment items within existing properties, where the owner has leased the property post 1st of July 2017. Nevertheless, structural improvements can still be claimed, as this forms a majority of the claim, a prepared schedule is still worthwhile.

For all owners of income producing property, it’s worthwhile investigating whether your property qualifies by talking to Opteon, who can provide you with advice for your property.

What does structural improvements and plant & equipment refer to?

These are defined by the ATO and not completely straightforward. Please refer to the table below for list of the kind of items you may be eligible to claim for under theATO classifications:

STRUCTURAL IMPROVEMENTS	PLANT AND EQUIPMENT
The main building	Window furnishings
Outbuildings e.g. Garage	Carpet
Retaining walls	Kitchen appliances
Pools	Air conditioners and ceiling fans
Fencing	Smoke alarms
Paving and driveways	Hot water service
Pergolas
Even the clothesline!

What happens when Opteon inspects my SMSF property for a tax depreciation schedule?

On your instructions, one of our property valuation specialists will complete a comprehensive internal and external on-site inspection of the property. Our team then reviews the potential deductions, including the building and structural improvements, extent and quality of the renovations, plant items and eligible common areas to prepare the tax depreciation schedule.

Opteon will then provide you with an ATO compliant report using two calculation methods to ensure you claim maximum benefits. Opteon is a registered tax agent, which is an ATO statutory requirement for providing depreciation schedule services.

What should you do next if you want to fully maximise your SMSF property investment?

You can contact Opteon and our team of tax depreciation experts for more information or request a quote for a tax depreciation schedule for your property.

Please contact us if you would like more information on how we can help you with a property valuation for your SMSF or a tax depreciation schedule. For a free quote please email [email protected] or call 1300 40 50 60. We can’t wait to help you!

 

Disclaimer: Opteon does not provide accounting, specialist tax or financial advice.

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