Australia’s leading tax depreciation specialist, BMT, is reminding property investors to lodge their tax returns by 31 October or risk receiving a ‘failure to lodge on time penalty’ from the Australian Taxation Office (ATO).
“For property investors, lodging a tax return is an opportunity to maximise the cash flows on their investment by submitting claims for depreciation deductions on both capital works and plant and equipment,” said BMT Managing Director, Brad Beer.
“Submitting this past 31 October might mean risking a penalty, which could then reduce the net cash flows otherwise derived from the asset.”
According to the ATO’s website, the ‘failure to lodge on time penalty’, or ‘FLT’, is calculated at the rate of one penalty of $170 per 28 day block that the return is outstanding.
Investors who have more than one tax return outstanding, a poor lodgement history, or who have not complied with a request to lodge their tax return are additionally more likely to receive these penalties and have their tax savings eaten into.
“One of the cash flows generated by an investment property outside of rental payments comes from the depreciation deductions which are itemised in a professional tax depreciation schedule,” continued Brad Beer.
“However, these cash flows will be significantly reduced if investors forget to submit on time and incur one, or even multiple, penalties.”
Investors using a registered tax agent may be able to lodge later than 31 October without incurring an FLT according to the ATO, however it’s important to discuss this possibility with a registered tax agent prior to the 31 October deadline.
“Luckily, this means that there is still time this year to submit a return prior to the deadline, or to organise this submission with a registered tax agent,” continued Brad Beer.
“I urge all property investors who have not yet submitted their tax return to contact a registered tax agent immediately,” concluded Brad Beer.
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BMT Tax Depreciation