MANY owners of investment properties in WA do not know they can significantly boost their cash flow during a period of high interest rates by claiming tax deductions for a large number of items through depreciation benefits.
According to Paul Bennion, Managing Director of tax depreciation specialist DEPPRO, even garden gnomes can be depreciated for tax purposes.
“Under taxation, ruling TR2006/15 garden gnomes are depreciable as plant over their economic life,’’ he said.
“Many investors in WA totally underestimate the number of items that can be depreciated for tax purposes and this comprehensive list can even include garden gnomes.
“DEPPRO is the largest specialist Depreciation Consultancy in Australia and it estimates that only one in five residential investors make use of the tax depreciation entitlements which are available to all investors on all investment properties.
“For an average property investment residential property in Australia this can equate to over $100,000 in possible tax benefits through depreciation. A large proportion of these tax benefits are never claimed which means that each year hundreds of millions of dollars in tax benefits are lost every year by investors not claiming their legitimate entitlements.”
Mr Bennion said as part of its service to owners of rental properties, DEPPRO searches for a large number of items that could be claimed in a depreciation schedule.
If the tax benefits flowing from the depreciation schedule are less than the cost of the schedule (average cost is $600), DEPPRO will refund the cost of the schedule back to the client.
“Depreciation is a complex area of taxation that requires a professional company to undertake a depreciation schedule because of constant changes in rules,’’ he said.
“The ATO is now taking a more aggressive approach to tax deductions made by residential investors and has asked a large number to provide more details about their claims relating to property investments.”
Mr Bennion said property investors should check that the company undertaking their tax depreciation schedule is a member of the The Australian Institute of Quantity Surveyors (AIQS).
DEPPRO can be contacted on 1300 888 489