We’ve all heard the line, ‘a man walks into a bar’ and waited for the joke at the end of the sentence, but when a tax depreciation specialist walks into a bar it’s no laughing matter as there is much more to uncover.
Many pub, hotel and tavern operators are losing thousands annually by failing to have a tax depreciation schedule prepared for their property.
Items such as drink dispensers, gaming machines, chairs and tables, glassware, carpet, air-conditioning units, glass washers, A/V equipment, cool room refrigerators and even the bar itself are all depreciable.
It’s essential to contact a specialist Quantity Surveyor such as BMT Tax Depreciation to arrange a tax depreciation schedule to ensure the available deductions for these items can be claimed.
As part of the process of arranging a depreciation schedule for any commercial property (including pubs, hotels and taverns) our specialist staff will perform a site inspection to uncover the structural and fixed items which can be claimed as capital works deductions as well as all of the removable plant and equipment assets contained within the property. They will also uncover any renovations that have been completed to the property, even those completed by a previous owner.
As pubs, hotels and taverns are frequently renovated by their owners, it is also important to be aware that additional deductions may apply when renovating.
A depreciation schedule should be arranged prior to commencing any renovation work and updated after the renovation is complete. This will ensure the owner can claim deductions for the remaining un-deducted depreciable value of any assets scrapped and removed during the renovation and also include deductions for newly installed assets.
The following table provides an example of the deductions we found for the owner of a hospitality establishment purchased for $3,107,060.
As this example shows, the depreciation deductions can be quite substantial.
In the first full financial year alone, the owner of this property could claim $288,312 in depreciation deductions.
Over the life of the property, the deductions for the owner of a hotel, pub or tavern can total in the millions of dollars.
To learn more about claiming depreciation for any commercial property, visit our commercial property depreciation page.