When is the ideal time to purchase a tax depreciation schedule?

Tuan Duong

Tax Return deadline for self-lodgements to the Australian Tax Office (ATO)

For your 2018-19 tax returns, it is important to keep in mind the deadlines set by the ATO. Tax returns must be lodged prior to the 31st of October 2019 as any lodgments made after this date may be subject to a ‘failure to lodge’ penalty. This applies to individuals lodging their tax returns themselves.

Ideally, investors intending to claim depreciation as a tax deduction should prepare their depreciation schedules prior to the 31st of October 2019. Fortunately for investors, Duo Tax Quantity Surveyors are market leaders in providing fast turnaround for tax depreciation schedules of anywhere between 3 to 10 business days. Enquire with us at info@duotax.com.au if you have a rental property address you would like us to provide a tax deduction estimate free of charge!

If you are unsure about tax return lodgments, refer to https://www.ato.gov.au/Individuals/Lodging-your-tax-return/

When is the ideal time to purchase a tax depreciation schedule?

The ideal time to purchase a tax depreciation schedule would be immediately after you settle on the property. This will ensure that you are better prepared when it comes to tax time and that you have every document ready for your accountant, reaping the tax benefits available. If you do not purchase your depreciation schedule on time, you may have already missed a large portion of tax deductions. Recently purchased old properties could also be eligible for tax deductions – you should always consult a Quantity Surveyor to see if there are any deductions available.

The great thing about the fee as well is that it is also 100% tax deductible! Ensure the report is purchased before the end of financial year (30th June).

Not only this, this will allow us to complete the site inspection in a more efficient manner as we will have access to an empty site, allowing us ease of access when completing the survey. We found that vacant properties usually allow us to book an inspection and head out to the property in a shorter amount of time as well – providing your tax depreciation schedule to you in a faster manner!

However, if you can’t purchase your depreciation report in the same financial year as the time you leased the property out, you should be eligible to amend your tax return for the previous 2 – 4 years (2 years for individuals and 4 years for company). If you have purchased property much later than 2-4 years, you may raise an objection with the tax office to yield even more depreciation.*

One of the questions that are frequently asked is ‘What is the point of purchasing a tax depreciation schedule if I just recently settled on the property and the end of financial year is approaching already?’

We ‘pro rata’ all reports to ensure that your claims are not missed. This means that there may be a few thousand dollars of tax deductions available, even in a short time span. This is due to ‘immediate write offs’ and ‘low value pool’. The figure below portrays this.

YearFinancial YearsPlant & Equipment*Capital WorksTotal Depreciation
119/06/19 – 30/06/19$2,394$239$2,633

As you observe, even a small period of time such as 11 days still entitles you to a total depreciation of $2,633.

Contact Duo Tax Quantity Surveyors today for a free assessment of your property. As we understand that many individuals have deadlines and require the report within a few days, contact us and we will be sure to meet your deadlines.

*Please discuss this with your accountant prior to engaging us for tax depreciation services as this forms tax advice.
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Disclaimer: Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek a second professional opinion for any legal or tax issues raised in your investing affairs.

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Tuan Duong

Tuan is an award winning Quantity Surveyor and leads Duo Tax Quantity Surveyors – Australia’s fastest growing provider of Tax Depreciation.

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