Analysis by BMT Tax Depreciation, Australia’s leading supplier of depreciation schedules, shows that ducted air conditioners, floating timber floors and solar power systems are the assets that generally have the highest depreciable value for property investors.
“Based on our experience preparing thousands of property depreciation schedules, we have found that these assets will average a combined depreciable value of approximately $27,000 in a residential property,” said BMT Chief Executive Officer, Bradley Beer.
“In the first financial year alone, these three items could result in about $3,400 in deductions for the owner,” said Bradley Beer.
While these assets generally result in the highest depreciation deductions for property owners, there are other items that BMT find more frequently.
“The three depreciable assets we find most often during a site inspection are hot water systems, split system air conditioners and bathroom accessories,” said Bradley Beer.
“We find that these assets have a combined average depreciable value of around $5,000.
“For an investor, these three items could result in a first financial year deduction of $1,100 and a cumulative deduction of around $3,500 over five years,” said Bradley Beer.
There are also a number of assets investors easily miss and fail to maximise depreciation deductions for, including smoke alarms, garbage bins and exhaust fans.
“The depreciable value of these items will usually total $1,200 and as these smaller ticket items are often valued less than $300 each, they could also entitle their owner to claim the full amount as an immediate write-off in the first financial year,” said Bradley Beer.
“The deductions for assets found in an investment property add up and it pays for an investor to understand how depreciation works and which items can be depreciated.
“When preparing a depreciation schedule for a property investor, specialist Quantity Surveyors will complete a detailed site inspection to ensure that no assets are missed. This will ensure the depreciation deductions for the owners are maximised,” said Bradley Beer.
Investors can search and find out the depreciation rate and effective life of any depreciable asset found in an investment property by downloading BMT’s Resi Rates app from the App Store for iPhone and iPad, Google Play for Android devices , or use RateFinder online today.
Bradley Beer | Chief Executive Officer
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BMT Tax Depreciation