This month I’ll try and save you money – faster!
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 a director of quantity surveying firm Washington Brown. For more QS Corner tips and information on property depreciation including a FREE online tax depreciation calculator, visit www.washingtonbrown.com.au
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.