Yawn... many of us hate tax. Or are at least bored by it. (sorry to the few details people I just offended)
But what if I said the 3 minutes you take to read this could be worth $3000? $6000? more?
With tax returns due at the end of the month (if you lodge with an accountant) I always get asked about depreciation at this time of year. Truth is, it doesn't matter when, but at some point you should ask yourself..."have I got depreciation schedules on all my investment properties?"
Now, some of you are saying "I don't even know what that is!"
Ok, what is depreciation? In a nutshell:
Depreciation is a reduction in the value of an asset over time, due in particular to wear and tear.
"provision should be made for depreciation of fixed assets" - in residential property this means your carpet, blinds, oven, dishwasher, etc etc. Basically anything that isn't part of the structure of the building and can wear out.
The bad news: this stuff wears out and needs replacing eventually.
The good news: the ATO lets you claim the cost of wear and tear every year.
So if you put in new carpet last year - you can claim a portion of the wear this year. And you should. Why? Because this creates a "phantom" tax loss - ie a claim that reduces your taxable income but doesn't cost you actual cash this year.
That means you pay less tax.
That is good news, and its worth thousands (see - I told you it would be worth it to keep reading).
If you are a property investor trying to grow a portfolio and have lots of properties, or even just 2 or 3, then you need to learn to manage your cashflow. It's one of the hardest parts of long-term success. Let's face it, we all hit cashflow walls occasionally, and if you ever want to take a holiday you need to know you can pay all those bills. So please, get a QS report done sooner or later. You won't regret it and you will make lots of $ back every year.
After a cheeky headline like the one above I know you're not still reading because I am entertaining. Wait no more - here is the free stuff I promised. Well, I know the good people at Depreciator - one of Australia's few quality nationwide residential Quantity Surveyors I would trust. I have personally used them on investment properties of mine and been thrilled with the results. They offered a discount for my clients. I don't get any commission at all for this, I just want my clients, and anyone who visits this blog - to get a really good deal.
So - it's discount time. Follow this link and take Depreciator up on their offer of a phone call. When you get on the phone request a $55 discount and mention Precium.
Getting a good QS report results in thousands of money back over the years of claiming stuff. If you know someone who owns investment properties that isn't claiming all they can - then you are costing them thousands by NOT sharing this blog post to them. (do you feel guilty yet?)
Have a nice day :)