Issue 39 2016

Deductions in shared assets

Common property is depreciable too

As with any residential property, the structures and assets found in common areas of apartment or unit complexes will depreciate.

Assets found in common property areas entitle owners to depreciation deductions based on their percentage of ownership of the shared areas.

The Australian Taxation Office (ATO) identifies common property as areas within an apartment complex or development that are shared between owners, including pools, driveways, lifts and stairways.

To ensure depreciation claims are accurately maximised, a specialist Quantity Surveyor will assess the property’s entitlements found on the Strata Plan, Plan of Subdivision (PS) or the Building Unit Plans (BUPs) and accurately calculate a percentage of ownership.

A depreciation specialist will also visit the property and carry out a detailed survey including identifying, measuring and costing the building, fixtures and fittings.

Common property assets may qualify for either an immediate write-off or the low-value pool, dependent on the owner’s interest in the asset. For example, if the owner’s portion of the asset is $300 or less, they will be entitled to write-off the full amount in the first year. If the owner’s interest is $1,000 or less, the increased rates of depreciation can be applied through the low-value pool.

As every development complex is different, it is important that deductions are apportioned correctly. Utilising a BMT Tax Depreciation Schedule will assist apartment and unit owners to claim the maximum deductions available.