» Outdoors

Kerb appeal – find tenants for your rental property with a tidy home exterior

BMT team — Fri, 15 Feb 2019 05:20:52 +0000

Prospective tenants are no different to prospective buyers – they’re all attracted to a well-presented property. You want prospective tenants to want your home and getting them through the front door is the first step. Before commencing the advertising and marketing campaign, ensure your investment property’s presentation has exceptional kerb appeal to attract quality tenants. You’re more likely to find a tenant quickly, keep them long-term and obtain the premium rent if the property is well kept. Tips to increase kerb appeal and find tenants for your rental property Complete pre-rental maintenance Keep the lawns mowed, edged and free from green waste Weed all gardens and mulch to create a fresh, easy-maintenance appeal Ensure the driveway is free of dirt and grease Knock down any cobwebs and clean the windows Prune and shape any trees or shrubs around the home and make sure gutters are clean and rust-free Ensure fences and gates are secure, safe and sturdy to appeal to tenants with children or pets and eliminate safety issues Make sure there is a number present on the house or letter box, as prospective tenants need to be able to find your home quickly and easily Check outdoor lighting is adequate and in working order If your investment is an apartment/unit If your rental property is in an apartment block or a building managed by a body corporate, these things may be beyond your control. In this case you can speak to the strata about the state of the building’s exterior. However, you can ensure your front door and entry way is tidy, clean and free from debris. A welcome mat and a freshly painted apartment front door can do wonders. Simple renovations to maximise your rental return You may be required to perform some small external renovations to your investment property. The trick is knowing which renovations will increase the value of your property, improve rents and impact on the depreciation deductions you can claim. It is also important not to overcapitalise when renovating your property. Don’t underestimate the value of a lick of paint. Taxing issues The big question when renovating rental properties is whether the expenses are capital in nature or a deduction. If you renovate before you get any income from the property by renting it out, the expenses become part of the property’s cost base and may not be tax deductible, but if you have a property that you currently rent out and do repairs on, your costs become deductible. Keep in mind that renovations should increase your depreciation claim for eligible items, which in turn will reduce your tax bill. You may also be eligible to ‘scrap’ assets you’ve removed during renovations, which can hold a remaining depreciable value and could be worth thousands of dollars in deductions. For a free estimate of the likely depreciation deductions you could be claiming from your renovation contact our expert team at BMT Tax Depreciation today.

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Claim depreciation on outdoor entertaining assets and save thousands

BMT team — Mon, 21 Jan 2019 05:43:33 +0000

There is no better time of year for outdoor entertaining than summer. The season’s warm afternoons offer perfect conditions for barbecuing with friends or relaxing in the pool. Australians love spending time outdoors, so it’s important to equip your investment property with assets that entice tenants to lease the property long-term and allow them to enjoy the property in summer. While outdoor assets such as swimming pools, patios and outdoor furniture don’t come cheap, property investors can recoup some of the costs for these assets by claiming depreciation. The below infographic shows some of the first full financial year depreciation deductions property investors can claim for common outdoor entertaining assets. Click on the image to expand. The owner of this investment property could claim: $1,400 for the table setting $1,250 for the deck $660 for the barbecue $640 for the pot plants $400 for the cushions $375 for the sails $250 for the bench seat $200 for the fountain, and $91 for the ceiling fan This adds up to an impressive $5,266 in the first full financial year alone, making it much more affordable to own an investment property. Other outdoor assets which attract depreciation deductions include retaining walls, fences, clothes lines, garden sheds, solar lights and watering systems. Investors can claim depreciation on assets for the duration of their individual effective life, as determined by the Australian Taxation Office. Outdoor assets generally have shorter effective lives than indoor assets as they wear out more quickly and therefore need replacing sooner. As an example, indoor furniture can be claimed over 13.33 years whereas outdoor furniture can be claimed over five years. Regularly inspect outdoor assets for wear and tear Seasoned investors are aware of the importance of keeping tenants happy by ensuring items at the property are kept in a good condition. Ensure you regularly inspect outdoor entertaining assets to check for any wear and tear. If your property has recently become vacant, consider making some improvements to your outdoor area to help attract tenants and add value to your investment property. If you plan on removing and replacing old assets, you may be entitled to claim 100 per cent of the unclaimed value as a deduction. Contact BMT Tax Depreciation to calculate your unclaimed deduction on 1300 728 726. To assist your decision of when to replace outdoor entertaining assets, use BMT’s Rate Finder tool to view the individual effective life and depreciation rates for the assets at your investment property.

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Prepping the pool at your investment property

BMT team — Thu, 03 Jan 2019 21:49:31 +0000

If your investment property has a swimming pool or spa, as the landlord you are responsible for ensuring the area is secure, child safe and complies with Australian pool safety standards. You should make sure the water is clean, chemically balanced and the pool and equipment are serviced before any new tenants take occupancy. You should also provide the necessary tools and equipment for day-to-day maintenance such as vacuums, hoses, brushes and scoops. Unless the lease agreement states otherwise, the tenant is responsible for day-to-day maintenance and upkeep of the pool. This includes cleaning and maintaining the chemical balance of the water and buying the necessary pool chemicals. In this article we will explore: Ensure adequate pool fencing meets standard height guidelines General repairs and swimming pool maintenance Make a big splash with extra cash Ensure adequate pool fencing meets standard height guidelines Safety is the most important factor landlords must consider if an investment property has a swimming pool or spa. Australian pool safety legislation differs in each state, so it is important to research your state’s requirements to ensure your pool and surrounding areas are compliant to help prevent incidents of drowning or other potential hazards that can occur in and around water. The current Australian Standard AS1926-2012 is applicable in New South Wales, Victoria, South Australia, Tasmania, Western Australia and the Australian Capital Territory. In these jurisdictions, the standard is the Building Code of Australia (BCA) and in many cases, there are local variations effected under legislation. The Northern Territory operates under AS1926.1 – 1993. Queensland has its own standard in place which is a modified version of AS 1926-2007 combined with a state standard QDC MP 3.4. General repairs and swimming pool maintenance Keeping the pool water clean and crystal blue all year around can be a time consuming job. Someone has to regularly test the water, add chemicals as needed and physically remove any debris such as leaves and branches. Filtration and heating systems also need monitoring. General swimming pool maintenance also involves ensuring that the pool decking remains free of obstructions and doesn’t become a dangerous slip hazard. Weekly tasks include: Physically removing debris, both from the surface of the water and the bottom of the pool Maintaining the chlorine and/or salt levels Checking the water level and topping it up if more is needed Checking the filter pressure and backwashing if necessary Monthly tasks include: Testing for water hardness (calcium content), pH, dissolved solids, and total alkalinity – adding chemicals as needed Cleaning the pool filter Checking the operation of the pump and motor Make a big splash with extra cash Pools can add additional depreciation benefits to your investment’s cash flow. One advantage of investing in a property with a pool is the extra depreciation deductions the owner will be eligible to claim. Property investors who are knowledgeable about their eligibility to claim depreciation deductions often only focus on the property itself and the building’s assets contained within. However, outdoor items and structures such as pergolas and pool houses are also depreciable due to the wear and tear that occurs over time. Easily removable plant and equipment assets such as outdoor furniture, lighting, the pool filter and pump are also depreciable. If you would like a free estimate of what depreciation deductions are available for your investment property, simply contact BMT Tax Depreciation or call 1300 728 726 and talk to one of our expert staff today.

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Is your investment property winter ready?

BMT team — Tue, 12 Jun 2018 00:31:45 +0000

With the colder weather now well and truly upon us, here are a few things you can check on to ensure your investment property is winter ready. Gardens Gardens tend to be looking their dullest during winter, when the trees have lost their leaves and garden beds lay bare. But a few small fixes will get your garden looking presentable over the winter months and ensure it’s in good form come spring. While most tenants are responsible for garden maintenance in rental properties, it may be worth hiring a gardener if your property has more of an elaborate garden that needs special care during the winter months. Or if your property is sitting empty, there are a few easy ways to make it more presentable for prospective tenants. Start by pruning away any dead branches and if there are any dangerous overhangs trim them back too. Treat your lawn to a winter-specific lawn fertiliser to give it the nutrients it requires for cooler weather. If your yard is prone to falling autumn leaves, consider hiring a gardener to clean away any debris before it starts rotting. Heating and fireplaces With most house fires occurring during winter, it’s important to check that any heaters or fireplaces are in good working order. If your tenants have reported any issues or suspected faults, you should get on to it straight away. Not only does this ensure safety, it’ll keep your tenants warm and happy. Keep the cool air out Check if there are any cracks or holes letting cool air in, or any windows and doors that don’t seal properly. This will be making the home unnecessarily cold and will jack up your tenant’s heating costs. Insulation If your insulation is more than fifteen years old, it’s likely some gaps and holes have developed in it, allowing drafts to come through more easily. For this reason, if your insulation is getting a bit old it might be worth topping it up to ensure your home stays warmer easier this winter. Mould and dampness With everything shut up in winter, this lack of sunlight and airflow can easily lead to mould, especially in cold, dark areas such as bathrooms and cupboards. To avoid this problem, make sure there’s good air flow so any dampness doesn’t just sit there. While this is a bit hard to do if you aren’t living there yourself, you can assist as the landlord by ensuring that windows are able to open and close properly and that any exhaust fans are in good working condition. If a mould issue does spring up, deal with it properly and get the professionals in to eliminate all the spores. Leaks With the extra rain at this time of year, leaks may become more apparent. You should identify the root of the problem and get on to fixing it straight away to ensure leaks don’t develop and become even more serious. Otherwise you run the risk of water damage if it gets through to the carpet or furniture, for example. Fire alarms While fire alarm maintenance should be a year-round practice, it’s critical they’re in good working order in winter when tenants are regularly using heating and fireplaces. Clear out the gutters This is one of the most common winter home maintenance issues. Gutters can easily get clogged up in the winter months with any extra rain and falling leaves. Blocked gutters can cause leaking and water damage so ensure they’re free of leaves, twigs and other debris.

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Get your investment property in order for summer

BMT team — Mon, 18 Dec 2017 01:34:33 +0000

With Christmas just around the corner and the warmer weather already here, now’s the ideal time to make sure things are in order at your investment property before the Christmas and New Year break. Here are a few suggestions. Prepare the pool With the weather quickly heating up and some time off work to relax, tenants living in a property with a pool will be making good use of it now more than any other time of year. If you’re responsible for the cleaning and maintenance of the pool (as some landlords are, as per their rental agreement) make sure this has been done in time so it’s ready to go for the Christmas break. You should also check that all safety obligations are being met. This includes everything from correct fencing to adequate signage. If there is any damage around the pool area you need to fix (loose tiles or a broken shade sail for example), now’s the time to do it if you haven’t already done so. Be fire smart and check fire alarms Ensure your investment property is prepared for bush fire season, particularly if it’s in an area prone to fires. Ensure all smoke alarms are fully functional and that any fire safety equipment – such as a fire extinguisher – is in good working order and in date. Security alarms and locks With people heading away on holidays or to visit family at Christmas, home security is vital at this time of year. You’ll want to make sure that the locks on all windows and doors are working properly, that security screens are intact and any security alarm systems are operational. General maintenance and repairs If you’ve been putting off any repairs or regular maintenance, or your tenant has recently asked you to fix something at the property, do it now. It’ll be easier than getting a tradesperson in over Christmas. This could be anything from fixing insect screens that have holes in them, repairing that faulty oven or mowing the lawn (should that be your responsibility). It’s fair to say your tenant won’t be happy if they don’t have a working oven to cook their Christmas Day roast in! Avoid having unhappy tenants by getting on top of repairs and maintenance before Christmas. Air conditioning The air conditioner is going to be in high demand over the coming weeks. Arrange for cleaning or repairs if needed to make sure the AC is fully operational for the summer. Check on rental payments Keep in mind that with several public holidays over Christmas and New Year, the processing of rental payments may be delayed by a day or two in some cases. This is a common time for payments to be delayed, often at no deliberate fault of the tenant. Be aware of this, should you depend on your rental money as soon as it comes in, and make other arrangements if this will delay any of your own payments. It is also likely that your property manager’s office or agency will be shut down over Christmas or at least on the public holidays, so it’s best to get in with any queries or questions before then. With the peace of mind that all these jobs have been sorted you can kick back, relax and actually enjoy the break, as can your tenants.

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Can you claim previous renovations?

BMT team — Fri, 25 Aug 2017 02:52:46 +0000

One question often asked by investors who are considering purchasing an existing second-hand property is whether or not they can claim deductions for work that has been completed to the property by a previous owner. The rules have always been complicated for investors and for this reason it is best to consult with a specialist Quantity Surveyor for advice for any property being considered and to obtain a comprehensive depreciation schedule. Given the federal government has recently proposed changes to the way plant and equipment items are depreciated, the rules could get even more complicated in future. To help investors let’s take a look at the existing rules which apply, the proposed new legislation changes and some of the property items which may hold hidden depreciable value for investors which they may be unaware of. Unfortunately this often means they can miss out on claiming the maximum deductions available. In this article we will explore: Claiming deductions for the building structure and any structural work Claiming deductions for plant and equipment assets installed by previous owners Example scenario – deductions for work completed by a previous owner Claiming deductions for the building structure and any structural work Under existing depreciation legislation, the Australian Taxation Office (ATO) allows investors to claim capital works deductions in any residential building where construction commenced after the 15th of September 1987. Capital works deductions make up 85-90 per cent of a total depreciation claim. This applies to the structural items of the building and any fixed items, such as the walls, doors, windows, kitchen cupboards, retaining walls, toilets, sinks and the roof. For a residential property, investors are eligible to claim capital works deductions at a rate of 2.5 per cent per year for a maximum of forty years from the property’s completion date. Many investors think that due to these date restrictions, if a property pre-dates 1987 they won’t be eligible to capital works deductions. However, this is often not the case, as many investment properties built prior to 1987 have undergone some form of renovation. The ATO allow owners of properties to claim capital works deductions for structures added by a previous owner so long as the work is completed within the qualifying dates. The good news for investors is that the federal government have not made any changes to the way in which capital works deductions will be applied in future within the drafted legislation proposed. Claiming deductions for plant and equipment assets installed by previous owners This is where the rules could become more complicated in future. Under existing legislation investors could claim plant and equipment items (which are the easily removable assets for example ovens, range hoods, smoke alarms, carpets and exhaust fans) in any residential property no matter how old the building. For these items, the ATO sets an effective life over which deductions should be claimed. However, the rules may change under the federal government’s proposed new legislation and any investor who exchanges contracts on a second-hand property after 7:30pm on the 9th of May 2017 will no longer be eligible to claim deductions on plant and equipment assets installed by a previous owner, only on those items they add to the property themselves. It’s important to be aware that owners of newly built properties will still be able to continue to claim plant and equipment depreciation deductions as normal. For those who exchanged contracts prior to the 9th of May 2017 there is more good news. The federal government has advised that new legislation policy will be grandfathered. This means these investors can continue to claim depreciation for work completed by previous owners under the pre-existing legislation. Of course, the changes are dependent on the outcome of the government passing the draft legislation through the senate. Example scenario – deductions for work completed by a previous owner The following table provides examples of some of the deductions an investor could claim for work completed to an investment property by a previous owner. In the above scenario, the investor exchanged contracts and settled on the property prior to the 9th of May 2017. Therefore they are still eligible to claim depreciation for plant and equipment additions that were made by a previous owner. They also will be eligible to claim capital works deductions for structural work completed. However, if the proposed new rules are implemented and the work completed above is in a property where the investor exchanged contracts after the 9th of May 2017, the deductions would be reduced to only include the structural work completed including fixed items (such as the retaining wall, the outdoor deck, kitchen cupboards and toilet). The table below demonstrates the difference in deductions for an investor who exchanges contracts after the 9th of May 2017 based on the proposed new legislation. If an investor purchases new plant and equipment assets themselves and has these installed to a property, the depreciation for these assets will be able to be claimed using the existing depreciation methods, no matter how old the property is or when they exchanged contracts. A specialist Quantity Surveyor can ensure that an investor claims the correct depreciation deductions based on their individual scenario, including any work completed during renovations. By contacting an expert and arranging a comprehensive tax depreciation schedule, this can help an investor to ensure the deductions they claim are correct and in line with the latest policy enforced by the ATO.

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Swimming pool items which make a splash

BMT team — Tue, 22 Nov 2016 22:38:56 +0000

As summer approaches and the weather warms up, many Australians will be taking the plunge into their backyard pools. Whilst swimming pools and spas offer a great place to escape the heat, there are a number of pros and cons for investors to consider before they decide to rent out a property which has a pool. Let’s take a look at some of the advantages and disadvantages and also outline some of the pool items which attract depreciation benefits for their owners. Landlords must ensure areas comply with pool safety legislation Safety is the most important factor landlords must consider if a rental property has a pool. It is important to check the requirements each state has in place to ensure your pool and surrounding areas are compliant to help prevent incidents of drowning or other potential hazards that can occur in and around water. Whilst the rules in each state differ, some things to consider when scrutinising the safety of a pool area include ensuring adequate pool fencing which meets any height guidelines; checking that gates are fitted with a latching device, swing outward from the pool area and are self-closing; have filtration systems which comply with Australian standards and do not use hard covers as safety barriers in place of a fence for spas. Earlier this year, the New South Wales Government also introduced new laws for pool and spa compliance from the 29th of April 2016. Those with properties with pools located in this state must obtain a Swimming Pool Certificate of Compliance before properties are sold or leased. Pools increase maintenance and insurance costs Owners of rental properties must always be prepared to budget for necessary repairs and maintenance costs. However, if a rental property contains a pool the potential costs are generally higher. If tenants are unwilling to keep the pool cleaned regularly, this may mean hiring a cleaner to complete the job to avoid the water turning into a murky algae and leaf filled disaster. As there is an increased chance of accidents occurring in properties which contain pools, insurance expenses are also likely to be higher, so investors must factor this into their budget. It isn’t all bad news though. Investors are able to claim the costs of repairs, maintenance and insurance in the year the expense is incurred when they visit their Accountant. Pools may not necessarily add value or increase rent Whilst pools sound like appealing features, they don’t necessarily add value to a property or help to attract potential tenants. In fact, oftentimes they can be seen as a hassle and even dangerous, particularly if tenants have a young family. A recent survey of more than 1,000 Australian homebuyers by finder.com.au found that swimming pools were the seventh most desirable feature in a home. More desirable items sought out on the list included air-conditioning, a garage or carport area, a backyard or garden, solar panels, a deck or pergola and a dishwasher. Needless to say, pools can be a hit or a miss and research suggests that investors should only consider buying a property with a pool or renovating to add one if it is located in the right suburb. This is because pools are far more likely to receive use in areas with warmer climates. Investors need to consider the fact that during winter and cooler months, pool areas will often go unused which can result in the condition of the area deteriorating. Should a rental property become vacant at the wrong time, this could make it less attractive to rent to potential tenants. Depreciation benefits One of the biggest benefits of renting a property with a pool is the depreciation deductions the owner will be eligible to claim. Investors who are aware of their eligibility to claim depreciation deductions often focus on the building itself and the assets contained inside. However, outdoor items and structures are also depreciable due to the wear and tear that occurs over time. The following graphic provides examples of some of the structural items which can be claimed as a capital works deduction and some of the easily removed assets which can be depreciated as plant and equipment. As you can see, items in the pool area create a $2,874 splash of deductions in the first financial year alone for the owner of the above property. Fixed items such as the inground pool, slide, diving board, spa, pool fence and pool house resulted in $1,577 in capital works deductions in the first financial year for the owner. Easily removable plant and equipment assets such as the furniture, pergola, couch, outdoor lights and the pool filter and pump resulted in $1,297 in depreciation deductions for the owner in the first year.

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Depreciation deductions are like finding hidden Easter eggs

BMT team — Wed, 23 Mar 2016 22:42:19 +0000

On your first glance of an investment property this long weekend, all you might think about is the places the Easter Bunny could hide chocolate eggs where the kids won’t be able to find them. As specialist Quantity Surveyors, some of these same hiding spaces contain much more. When we look around investment properties during our site inspections, our eyes are peeled for treasures that can maximise an investors claims and put more money in their pocket during tax time. Quantity Surveyors look for two specific categories of items the Australian Taxation Office (ATO) allows investors to claim depreciation deductions for: Structural works (capital works deductions) that may have been completed during the original construction of the property and any new additions or renovations that have been added Easily removable fixtures and fittings (plant and equipment depreciation) both inside and outside the property To help explain what we’re looking for, we wanted to present you with an Easter egg hunt showing the depreciable items that can be found in the yard of one investment property below. As the image shows, even the most unexpected items in a property can provide depreciation deductions for the owner of an income producing property when they complete their tax return. Who of you would have thought that the swing set and the sand box would allow you to claim depreciation? It goes to show why it is so important to ask one of our expert staff to come out and perform a site inspection and prepare a depreciation schedule outlining the maximum possible deductions for you. Of course, the $1,575 in first year deductions outlined within our hunt is only a very small portion of the deductions we’ll find you. We will also find depreciation deductions in the original building structure of any property constructed after the 15th of September 1987 and for any renovations or additions which have been completed within the legislated dates (even if these were completed by a previous owner). Plant and equipment assets such as stoves, ovens, hot water systems, carpets, range hoods, door closers, garbage bins and air conditioners will also add up to significant depreciation claims for an investor. So hop to it. Contact one of our expert staff and request a depreciation schedule. You might just find yourself jumping for joy when you visit your Accountant at the end of financial year.

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Add value and increase deductions with an alfresco area

BMT team — Mon, 22 Feb 2016 22:57:25 +0000

Claim depreciation on outdoor structures and save Australia is made for outdoor living, so it is little wonder that alfresco areas have become sought after additions in any property. Owners see great value in adding permanent weatherproof structures to an investment property. Creating an indoor-outdoor environment which can be enjoyed all year round not only adds value to the existing property, but it can also help to attract potential tenants and potentially increase the annual rental yield. What many investors don’t realise is that by adding an alfresco or an outdoor structure of any kind, they will also impact the depreciation deductions they can claim. Any structures added to an investment property will entitle the owner to claim additional capital works deductions, also known as building write-off, at a rate of 2.5 per cent per year. If the owner installs any new plant and equipment items, including removable or mechanical assets, this will also entitle the owner to claim depreciation deductions for these items. The deductions an owner can claim for any new plant and equipment items will be based on the individual effective life of each item as set by the Australian Taxation Office. Case study Let’s take a look at a scenario in which an investor decided to add a seven metre by four metre outdoor alfresco to their existing four bedroom investment property. The structural work on the alfresco cost $15,010. The owner also chose to install plant and equipment assets totalling $9,217 in value, bringing the total cost of work done to the property to $24,227. Below is a summary of the costs of the new additions and the first full year depreciation deductions the owner could claim. As the table shows, the owner of this property could claim $375 in capital works in the first full financial year deductions for structural items such as the concrete slab, walls, tiles, roof and lattice screening. The owner of the property would also be entitled to claim capital works for the remaining life of the property (forty years) for new structural items. Plant and equipment assets installed such as an outdoor ceiling fan, outdoor furniture, a freestanding BBQ, light shades and garden solar lights resulted in a $3,831 deduction in the first full financial year for the property owner. This brought the total depreciation deduction of new items installed to $4,206 for the owner. These deductions would be in addition to any remaining depreciation deductions the owner could claim from the pre-existing property. It is important to note, that if the property owner was to remove any existing structures or assets during the process of adding the alfresco area, they may also be entitled to additional deductions. If any remaining depreciation deductions exist for items or assets being removed during a renovation or addition, the property owner may be entitled to claim a deduction for the full amount of the remaining depreciation for items scrapped within the financial year of their removal. Learn more: What is scrapping? Property owners should always seek the advice of a specialist Quantity Surveyor when they plan to make any alterations to their rental property. If the owner has an existing depreciation schedule, the owner will need to have it updated, and if assets or structures are being removed, the Quantity Surveyor should perform a site inspection before and after work commences to ascertain the remaining depreciation of items being removed and value new structures and items added to update the depreciation schedule for the owner. To find out more or request a quote for a tax depreciation schedule call 1300 728 726 today.

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Outside there’s $3,491 more in deductions to be claimed

BMT team — Fri, 18 Sep 2015 05:53:23 +0000

As spring brings warmer weather to our backyards, it is a great time for property investors to think about the outdoor areas of their investment properties. Outdoor areas in investment properties contain a number of structures and assets which are worth thousands of dollars for their owners. These items also experience wear and tear over time. The Australian Taxation Office (ATO) allows owners of income producing properties to claim this wear and tear as a depreciation deduction when completing their annual income tax assessment with an Accountant. Before an investor can claim depreciation, it is recommended they consult with a specialist Quantity Surveyor to arrange a tax depreciation schedule for the property. A tax depreciation schedule will outline all of the deductions available for the structure of the property as well as the plant and equipment assets contained both inside and outside of the property. Assets located outside of an investment property are amongst those frequently missed by investors. When an investor requests a tax depreciation schedule from a Quantity Surveyor, they will include a detailed site inspection of the property to take photographs and record every asset found. The deductions a specialist Quantity Surveyor outlines on a depreciation schedule are split into two types. Structural items will be classified as capital works deductions, while assets which can be easily removed from the property can be claimed as plant and equipment depreciation. Items classified as capital works will depreciate at a rate of 2.5 per cent each year over forty years. Plant and equipment assets, on the other hand, each have an individual effective life as set by the ATO. The following graphic shows some of the depreciable plant and equipment assets and structural items found within the yard of an investment property as well as the first year depreciation deductions an investor could claim for these items. Examples of outdoor structures which depreciate, as shown in the graphic, include the in-ground swimming pool, pool fencing, shade sails, pavers and window awnings. Other common structural assets found in the yard which depreciate include concrete slabs, clothes lines and sleepers. Depreciable plant and equipment assets found in the yard of the pictured property included solar garden lights, outdoor furniture, garden watering systems, swimming pool filters and chlorinators. Other common examples of depreciable plant and equipment assets which might be found in the yard include garbage bins, garden sheds and freestanding barbeques. As the assets outside a property experience wear and tear, it also makes sense to check in regularly with your Property Manager to see if there are any necessary repairs and maintenance required. If there are, it is also best to check with your specialist Quantity Surveyor before completing any work to the property. While work completed to repair damage (such as mending part of a fence) or to prevent deterioration to a property (for example oiling a deck) is able to be claimed as an immediate deduction in the year of the expense, any work which improves the condition or value of an object beyond it’s original state at the time of purchase will be considered a capital improvement. Capital improvements completed will also be classified as either capital works deductions or depreciated as plant and equipment using the asset’s individual effective lives. If an investor already has a depreciation schedule and plans to complete improvements to the yard, a specialist Quantity Surveyor can provide information on any remaining deductions for items planned for removal. Removing items could entitle an investor to claim additional deductions using a process known as ‘scrapping.’ Using this process, any remaining depreciable value can be claimed as a deduction in the financial year the item is removed. When any new structural additions or plant and equipment assets are added to an investment property, it is recommended to ask your specialist Quantity Surveyor to provide an updated depreciation schedule outlining the deductions for any new items. Maximising depreciation deductions for items outside a property and carefully considering whether any improvements can be made can add thousands of dollars to an investor’s pocket. It also can add additional value to the property and appeal to tenants, helping to increase your rental return. Quantity Surveyors can provide a free estimate of the depreciation deductions available in any investment property. Request an estimate and obtain advice from BMT Tax Depreciation today. This article was first seen on sourceable.net

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