When buying things for an investment property, I always abide by this guiding principle: “A dollar today is worth more than a dollar tomorrow” … so deduct items as quickly as possible.
Generally speaking, it pays to have a little bit of tax knowledge, that’s why it’s worth remembering that individual items under $300 can be written off immediately.
Even if your portion of a more expensive item is under $300, you can still write it off.
For instance, say an electric motor to the garage door cost an apartment block $2,000. If there are 50 units in the block, your portion is $40.
You can claim that $40 outright – as your portion is under $300.
More importantly, if buying a microwave for your property, buy one for $295 as opposed to $305.
By doing this you’ll be able to claim $295 as an immediate tax deduction, as opposed to depreciating it at the prime cost rate of 10% per annum – where you can only claim around $30 in the first year.
That’s an increase of close to 1,000%.
Tyron Hyde is director of Washington Brown and has over 15 years experience in the construction and development industry. Considered one of Australia’s leading experts in property tax depreciation, Tyron regularly presents at industry conferences and events and has published numerous articles on tax depreciation and property investment.
Tyron has a Bachelor in Construction Economics from University of Technology Sydney.
Click here to read more tips from Tyron!
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