My Number 1 Tip!

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Expert Advice with Tyron Hyde - 10/05/2017

In this month's QS Corner….. My Number 1 Tip!

 

I recently gave a webinar titled “8 Things You Don’t Know About Depreciation”. The feedback was excellent.

 

During the webinar, the most insightful topic I spoke about was on the effective life of depreciable items.

 

You see, when you buy an investment property part of the purchase price includes things such as carpet, ovens, blinds and other loose items.

 

The Australian Taxation Office (ATO) determines how long these types of items will last for. This determination then governs how much you are able to claim annually.

 

Simply put, if the carpet in your brand new house has an effective life of ten years and has a value of $1,000, you can claim $100 per year over a ten year period. Simple right?

 

But what happens when you acquire carpet that is seven years old?

 

Well, you (or a qualified quantity surveyor) can reassess the life of the carpet and assign a new effective life.

 

For instance, if the carpet is seven years old, you can say the carpet is only going to last for three more years. So now you can claim the remaining value at a rate of 33.3% per annum for the next three years to equal the same deductions you would have received over the ten years. 

Effective life deductions can make a huge difference to the annual amount you as a property investor can claim!

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Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent.  Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost. 
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
 

Read more Expert Advice articles by Tyron
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

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