While Bed and Breakfasts (B&Bs) have long been a popular choice of accommodation for weekend trippers and travellers, their popularity has been given a boost of late, largely thanks to a rise in number of international travellers to Australia.
Recent figures from the Australian Bureau of Statistics show a total of 663,500 visitor arrivals during September 2017, an increase of 2.6 per cent when compared to the same month the previous year.
During this period, international visitors spent a record $41.2 billion, providing a significant boost to the Australian tourism economy.
B&B owners may be seeing a rise in guest numbers due to this increase in visitor arrivals. As such, owners may be looking to purchase new assets to increase the capacity of their accommodation or to counteract any wear and tear.
These new assets could include beds, bed spreads, bar refrigerators and small cooking utensils such as kettles, toasters, pots and pans. Often these new items can become a costly business expense.
The Australian Taxation Office (ATO) allows commercial property owners and their tenants to claim depreciation deductions related to the wear and tear of a building and any plant and equipment assets contained within.
This means B&B owners would be able to recoup some of the cost of these new assets by claiming depreciation for them.
In addition, they would be able to claim depreciation for existing plant and equipment assets as well as capital works deductions for the building’s structure.
Below is an example of the deductions available to B&B owners.
As this example shows, the depreciation deductions for this type of property can be quite substantial and should not be overlooked.
In the first full financial year alone, the owner of this B&B could claim $25,816 in depreciation deductions.
Over the life of the property, the owner was able to claim $374,462.
BMT Tax Depreciation specialise in maximising depreciation deductions to ensure investors put more money back in their pockets.
By obtaining a BMT Tax Depreciation Schedule, property investors – including B&B owners – can rest assured that all available depreciation deductions are found and can be claimed in their tax return each year.
The fee for a schedule is 100 per cent tax deductible.
To learn more about claiming depreciation for any commercial property, visit our commercial property depreciation page.