The Australian Taxation Office (ATO) legislation states that only the owners of income producing properties are entitled to claim depreciation.
However, as an increasing number of Australian home owners decide to invest in property, many are also choosing to rent out their principal place of residence.
Home owners choose to rent out their principal place of residence for a number of reasons. It may be due to a need to relocate interstate for work, travel for a period of time overseas, to purchase and occupy another property, or even just to let out a part of the property.
Though home owners generally cannot claim depreciation for the period of time they are living in the property, they are still able to make a claim for both capital works deductions and plant and equipment items contained within the property for the time the property is income producing.
Home owners also may be entitled to claim a percentage of depreciation for a part of a household being rented out. Examples include a separately rented granny flat, a room let out for student accommodation, or a section of the household such as the downstairs area let out for additional income while the owners still live upstairs.
A BMT Tax Depreciation Schedule can calculate the depreciation based on the exact number of days a property has been rented in the first financial year for properties which are only rented certain portions of time.
For properties where the owners have only rented a part of the property, BMT will produce a tax depreciation schedule for the entire property. The owner’s Accountant will then be able to make a claim based on the portion of the area which is being rented.
If a home owner is earning income from their investment property for any period of time, it is always worthwhile consulting with a specialist quantity surveyor to find out more.
Hi ,
Thanks for the post. I would like to get a depreciation report for my principal property(from Dec 2011) which is currently rented out from July 2018. I have question regarding the CGT event. I know that i get CGT exemption by the 6 year rule. However if in case I sell this property in 2020 do i need to pay CGT since I have claimed the depreciation for 2 years?
Regards,
Hariharan.M
Hi Hariharan,
We’d recommend speaking with an accountant regarding your CGT question. They’ll be able to advise you based on your financial position.
To arrange a tax depreciation schedule, we’d recommend contacting one of our expert staff by calling 1300 728 726 or requesting a quote online. Alternatively, we can get our staff to contact you on the email you’ve provided.
Thanks,
BMT Team
Hi
Thanks for the post.
I recently purchased a brand new 2 bedroom unit in QLD. I have been living in it for two weeks now. However, I now need to return back to NSW for another six months to live with my mother. I’m quite keen to rent it out fully furnished while I’m gone. What sort of depreciation claims can I make?
Cheers
Dan
Hi Dan,
Thanks for reading our post and getting in touch regarding your property.
To get a better understanding of your property and situation it might be best if you drop us an email at socialmedia@bmtqs.com.au with your contact details. If you’d like, one of our team members can get in touch to discuss further and provide you with an estimate of the likely depreciation deductions you can claim for your property.
Thanks,
BMT Team