» outdoor depreciation

Claim depreciation on outdoor entertaining assets and save thousands

BMT team — Mon, 21 Jan 2019 05:43:33 +0000

There is no better time of year for outdoor entertaining than summer. The season’s warm afternoons offer perfect conditions for barbecuing with friends or relaxing in the pool. Australians love spending time outdoors, so it’s important to equip your investment property with assets that entice tenants to lease the property long-term and allow them to enjoy the property in summer. While outdoor assets such as swimming pools, patios and outdoor furniture don’t come cheap, property investors can recoup some of the costs for these assets by claiming depreciation. The below infographic shows some of the first full financial year depreciation deductions property investors can claim for common outdoor entertaining assets. Click on the image to expand. The owner of this investment property could claim: $1,400 for the table setting $1,250 for the deck $660 for the barbecue $640 for the pot plants $400 for the cushions $375 for the sails $250 for the bench seat $200 for the fountain, and $91 for the ceiling fan This adds up to an impressive $5,266 in the first full financial year alone, making it much more affordable to own an investment property. Other outdoor assets which attract depreciation deductions include retaining walls, fences, clothes lines, garden sheds, solar lights and watering systems. Investors can claim depreciation on assets for the duration of their individual effective life, as determined by the Australian Taxation Office. Outdoor assets generally have shorter effective lives than indoor assets as they wear out more quickly and therefore need replacing sooner. As an example, indoor furniture can be claimed over 13.33 years whereas outdoor furniture can be claimed over five years. Regularly inspect outdoor assets for wear and tear Seasoned investors are aware of the importance of keeping tenants happy by ensuring items at the property are kept in a good condition. Ensure you regularly inspect outdoor entertaining assets to check for any wear and tear. If your property has recently become vacant, consider making some improvements to your outdoor area to help attract tenants and add value to your investment property. If you plan on removing and replacing old assets, you may be entitled to claim 100 per cent of the unclaimed value as a deduction. Contact BMT Tax Depreciation to calculate your unclaimed deduction on 1300 728 726. To assist your decision of when to replace outdoor entertaining assets, use BMT’s Rate Finder tool to view the individual effective life and depreciation rates for the assets at your investment property.

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Add value and increase deductions with an alfresco area

BMT team — Mon, 22 Feb 2016 22:57:25 +0000

Claim depreciation on outdoor structures and save Australia is made for outdoor living, so it is little wonder that alfresco areas have become sought after additions in any property. Owners see great value in adding permanent weatherproof structures to an investment property. Creating an indoor-outdoor environment which can be enjoyed all year round not only adds value to the existing property, but it can also help to attract potential tenants and potentially increase the annual rental yield. What many investors don’t realise is that by adding an alfresco or an outdoor structure of any kind, they will also impact the depreciation deductions they can claim. Any structures added to an investment property will entitle the owner to claim additional capital works deductions, also known as building write-off, at a rate of 2.5 per cent per year. If the owner installs any new plant and equipment items, including removable or mechanical assets, this will also entitle the owner to claim depreciation deductions for these items. The deductions an owner can claim for any new plant and equipment items will be based on the individual effective life of each item as set by the Australian Taxation Office. Case study Let’s take a look at a scenario in which an investor decided to add a seven metre by four metre outdoor alfresco to their existing four bedroom investment property. The structural work on the alfresco cost $15,010. The owner also chose to install plant and equipment assets totalling $9,217 in value, bringing the total cost of work done to the property to $24,227. Below is a summary of the costs of the new additions and the first full year depreciation deductions the owner could claim. As the table shows, the owner of this property could claim $375 in capital works in the first full financial year deductions for structural items such as the concrete slab, walls, tiles, roof and lattice screening. The owner of the property would also be entitled to claim capital works for the remaining life of the property (forty years) for new structural items. Plant and equipment assets installed such as an outdoor ceiling fan, outdoor furniture, a freestanding BBQ, light shades and garden solar lights resulted in a $3,831 deduction in the first full financial year for the property owner. This brought the total depreciation deduction of new items installed to $4,206 for the owner. These deductions would be in addition to any remaining depreciation deductions the owner could claim from the pre-existing property. It is important to note, that if the property owner was to remove any existing structures or assets during the process of adding the alfresco area, they may also be entitled to additional deductions. If any remaining depreciation deductions exist for items or assets being removed during a renovation or addition, the property owner may be entitled to claim a deduction for the full amount of the remaining depreciation for items scrapped within the financial year of their removal. Learn more: What is scrapping? Property owners should always seek the advice of a specialist Quantity Surveyor when they plan to make any alterations to their rental property. If the owner has an existing depreciation schedule, the owner will need to have it updated, and if assets or structures are being removed, the Quantity Surveyor should perform a site inspection before and after work commences to ascertain the remaining depreciation of items being removed and value new structures and items added to update the depreciation schedule for the owner. To find out more or request a quote for a tax depreciation schedule call 1300 728 726 today.

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Outdoors can offer more

BMT team — Thu, 31 Jan 2013 22:57:20 +0000

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 Fencing Sleepers Concrete slabs Patios 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 Pumps. 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

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