As MKR’s British boys turn the heat up on the competition with 2 perfect and 3 near perfect dishes, investors can get a perfect score when claiming depreciation, by ensuring they claim everything they can. While contestants on the reality TV show vie for $250,000 prize money, investors themselves are able to claim their share of the “prize” when it comes to the kitchen in their investment property.
The cabinets, benches, sinks, splashback, kickboards, electrical fittings, door and handles are eligible for the capital works deduction which allows owners of investment properties built after the 16th of September 1987 to claim capital works at a rate of 2.5% over forty years from construction completion. Realistically kitchens are generally replaced more often so it is fair to say that most kitchens will be entitled to this component of a depreciation claim.
In addition to the above items, various items of plant and equipment are generally found in a kitchen and form part of an investment property.
These items include:
These items are eligible to be depreciated at various rates of effective lives determined by the Australian Taxation Office. Some of these items will be eligible to be categorised into the low value pool in the first year claim, boosting the deductions for the investor. A low value pool is for items that have an opening value of less than $1000 and assets that depreciate to be less than $1000 and legislation allows for them to be written off at a much faster rate.
Whilst the deductions available from the above assets may not be the $250,000 prize money the MKR contestants are competing for, investors can make certain that depreciation from the rest of the property is maximised to ensure they don’t miss out on their share of the depreciation prize pool.