With interest rates at a low of 3.0 percent and demand for rental properties remaining high, 2013 is the year to purchase an investment property.
Whether you are looking to purchase your first investment property, you already own an investment, or you are looking to broaden your investment portfolio, BMT has some helpful advice to improve the returns you make from the investment:
1. If purchasing a new investment property – get an estimate of the potential depreciation deductions before making a purchase. These estimates will give potential owners an idea of what the returns they are likely to receive. As soon as the purchase is made, also request a quantity surveyor to perform a site inspection and produce a tax depreciation schedule. The schedule will outline any immediate claims the new owner can make, as well as provide the complete details of what returns the owner will receive over the life time of the property (40 years).
2. If you own an investment and haven’t claimed depreciation before – ask your accountant to request to have the past two years claims amended. Even if you own an investment property and have not claimed – you can still receive the benefits from what could be thousands of dollars in unclaimed deductions.
3. If your investment property is older – find out if there have been any renovations made in the past. Though there are restrictions based on age for claiming deductions on a building structure (owners of any residential property built before 18th of July 1985 or any commercial property built before the 20th of July cannot make a claim for the capital works allowance), claims can still be made on the plant and equipment items for all property types and made for structural additions made after these dates.
4. For properties within larger complexes, include a claim for common property items such as lifts, lights, pools and spa pumps, fire alarm systems, gym equipment and air conditioning. Owners of apartments and units are entitled to make a claim for depreciation of common areas as well as what is contained inside their investment property.
Do you have any other tips to share?
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