Breadcrumbs

Case Study

Tax Benefits for a Fast Food Shop Fit Out

After purchasing a fast food restaurant and hearing about the deductions they can claim, Sam, who owns Burger Paradise (Pty) Ltd, got in touch with Duo Tax for a tax depreciation schedule to make the most of their fit out.

From the tax depreciation schedule, Sam realised that he was able to claim $95,300 as a first-year deduction for his fast food company.

Here's how.

The Numbers: Burger Paradise (Pty) Ltd Fast Food Shop Fit Out

Here are some figures regarding Burger Paradise (Pty) Ltd’s investment property:

Type of Purchase

He purchased the small burger joint in July 2021.

Rent

He fitted out the shop himself and replaced a large portion of the cooking appliances, POS assets, and restaurant furniture.

Expenses

The estimated cost of the total fit out was $150,000.

Commercial property owners can claim depreciation deductions for the building’s structure as well as any assets they own within their property. Because of this, Sam was eligible to claim depreciation on both the capital works (Division 43) and the plant and equipment (Division 40) assets installed during the fit out at Burger Paradise (Pty) Ltd’s new premises.

And because Sam is operating a small business with an aggregated turnover of less than $50 million [Burger Paradise (Pty) Ltd], he is now eligible for the temporary full expensing scheme. The scheme allows the company to write off the total cost of the plant and equipment immediately in the first year.

Based on just the cost of the fit out and the capital works depreciation, Burger Paradise (Pty) Ltd could claim $95,300 as their first year deduction. With their tax bracket of 25%, this means they benefited from a cash return of $23, 825!

As you can see from Sam’s scenario, tax depreciation schedules can make a significant difference in a business owner’s cash flow each year.

What sets commercial property depreciation apart from investment property tax depreciation is that commercial property owners and tenants can benefit from substantial tax deductions. So, if you don’t own your business premises like Sam and still undertook renovations and fit out the building, you can still claim:

capital works deductions for the structural renovations; and
deductions for any plant and equipment assets you added to the commercial building.

Here’s How Much You Could Be Claiming

As you can see from Burger Paradise (Pty) Ltd’s scenario, tax depreciation schedules can make a significant difference in an investor’s cash flow each year.

However, if you’re still feeling unsure about committing to ordering a depreciation schedule, we have designed a tax depreciation calculator to help you estimate what you could potentially claim on tax depreciation.

This is an accounting tool designed to help estimate and calculate the declining value of capital works and plant and equipment assets and relies on accurate figures to present accurate estimations.

Rental Property Depreciation Calculator

Obtain your tax depreciation schedule in 3 easy steps.

Step 1

Qualify your Property

Call us and we will ask you a few simple questions to qualify your investment property.

1300 185 498

Step 2

Order a Report

Order over the phone or via our online form and we will begin preparing your report.

Order Now

Step 3

Claim Maximum Deductions

Within approx. 5 business days your report will be delivered to you and your accountant.

View Sample Report

How can we help?

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