Commercial property attracts substantial tax deductions. We recently looked at the depreciation deductions available to commercial property owners, but what can you claim as a tenant in a commercial property?
In a commercial property, tax deductions are available for the wear and tear that occurs to a building’s structure and contained assets.
The claim is broken down into two categories, capital works and plant and equipment.
Capital works refers to the deduction for the building’s structure and any permanently fixed assets and includes things such as roofs, bricks, mortar, windows and wiring.
Plant and equipment refers to any assets deemed by the Australian Taxation Office (ATO) as easily removable from the property or those that are mechanical in nature. This includes items such as carpets, air conditioning, ovens or lights.
Who can claim what?
While owners can claim depreciation for the building’s structure and any assets they own within the property, tenants are entitled to claim deductions for assets they purchase and install during a fit-out.
Some common assets tenants can claim include flooring, desks, blinds or shelving. There is also a broad range of industry-specific assets. To search the full list of assets, visit BMT Rate Finder.
If lease conditions state a tenant’s property must be returned to its original condition when their lease expires, tenants may have to remove and dispose of assets which have remaining depreciable value.
In these circumstances, tenants can write-off these assets as an immediate tax deduction in the year the assets are removed. It is important to contact a specialist Quantity Surveyor to ensure every possible dollar is captured and no depreciable value goes unclaimed.
Why claim depreciation?
For business owners leasing their premises, claiming tax depreciation can make a significant difference to cash flow, meaning more flexibility when it comes to purchasing stock or undertaking any much-needed renovations.
Commercial tenants should contact professional Quantity Surveyors to obtain an ATO compliant tax depreciation schedule to maximise their claim.
BMT Tax Depreciation are the commercial property specialists, with expertise across various industries including primary production, mining, manufacturing, office towers, shopping centres and more.
For more information on commercial property depreciation, read our Commercial Capability Statement or contact the expert team at BMT Tax Depreciation on 1300 728 726.