When it comes to providing customers with a high-quality dining experience, good food and service is only part of the equation. It is equally as important for a restaurant to make a great physical impression on diners; they will pay attention to the general ambience and the overall quality of items such as furniture, artwork and even the cutlery and glassware.
For this reason, restauranteurs often outlay hundreds of thousands of dollars to create an impressive restaurant that will leave diners with a good taste in their mouth.
Fortunately, many of the fit-out costs can be recouped through depreciation deductions.
Depreciation is the wear and tear that occurs to a building and the items within it over time. The Australian Taxation Office allows commercial building owners and tenants to claim the wear and tear of the property’s structure and fixed items (capital works) as well as for the easily removable items within the property (plant and equipment).
This means that restauranteurs can claim depreciation deductions for many assets installed during the fit-out of a restaurant. And many are surprised at just how lucrative these deductions are.
The following case study shows just some of the restaurant depreciation deductions that can be claimed for common assets.
Hotel A has recently changed hands. Among several other things, its facilities include a fine dining restaurant. The following table shows the plant and equipment deductions from the restaurant that are available to the new owners.
The available restaurant depreciation deductions add up to an impressive $51,548 in the first financial year. Given that the hotel is a medium business and settlement took place in 2022, the new owners are entitled to the instant-asset write off. Not only does this make a significant impact on the restaurant’s cash flow, but the efficiencies resulting from the new fit out can reduce the operational costs of the restaurant.
To ensure that restaurant depreciation deductions are maximised, contact a specialist quantity surveyor to arrange a comprehensive tax depreciation schedule, which will outline the deductions available for every eligible asset. A BMT Tax Depreciation Schedule applies all industry-specific legislation to ensure commercial depreciation deductions are claimed to their full potential and compliantly.
BMT also applies current business incentives including the backing business investment and temporary full expensing depending on the business size, to ensure every cent is claimed.
To learn more about the restaurant depreciation deductions available in a restaurant, pub, or café, visit the commercial property depreciation page on the BMT Tax Depreciation website.
Disclaimer: The information provided in this article is based on restaurant size, date of acquisition, size of business entity etc. This information is not to be used as a quote or guaranteed tax depreciation amount. Contact BMT for a specialised tax depreciation schedule.