Over the holiday season, many of us have spent quite a bit of time entertaining and enjoying our backyard.
Whether you spent the hot summer weekends lying by the pool, had Christmas lunch with the family on your back deck, or had an Australia Day barbeque with a gathering of friends under a covered entertaining area, remember that more than likely while you were doing so, so too were the tenants of your rental property.
Improving the outdoors area can add great value to a rental property and help to attract potential tenants.
Property investors also need to be aware they can maximise depreciation deductions by claiming on the eligible items in the front yard, backyard and balconies of their rental properties.
Depreciation deductions can be claimed on these outdoors assets as either capital works deductions or plant and equipment depreciation.
Some of the outdoors structures which qualify for capital works deductions include:
- Retaining walls
- Concrete slabs
- Clothes lines
- In-ground pools and
- Above ground pools.
Examples of eligible plant and equipment items include:
- Outdoor furniture
- Garden sheds
- Garden hoses
- Garden watering systems
- Solar lights
- Pool filters and
If you are considering improving the areas outside a rental property, take special notice when removing and replacing old assets, particularly retaining walls, garden sheds and driveways.
Investors may be entitled to claim 100% of the unclaimed value as a deduction and should contact a specialist Quantity Surveyor to calculate the values and construction costs of the renovation.
Read more: Outdoors appreciation increases depreciation