What Is Depreciation?
As a building ages, its structure and removable assets undergo general wear and tear—that wear and tear results in the building declining in value. The decline in value is known as depreciation.
Thankfully, property investors can claim depreciation as a tax deduction, resulting in increased tax refunds!
Investors need to get their hands on a depreciation schedule to claim a tax deduction for depreciation.
The purpose of a depreciation schedule is to outline the value of your client’s Division 40 and Division 43 assets as well as how much it has depreciated and will depreciate.
This will give them a clear idea of how much they can claim.
We have produced a series of videos covering various scenarios where Landlords could benefit from tax depreciation, including brand-new or off-the-plan, second-hand and renovations on older properties.
Understanding Depreciation Can Grow Your Real Estate Client Base
Knowledge is power when it comes down to boosting your competitive edge as a Real Estate Professional; you can help your clients understand the finer details of what a tax depreciation schedule can mean for their investment is just one way to make sure they get the most out of it.
Property investors are always looking for a way to maximise their returns. But 70% of investors don’t benefit from tax depreciation because they don’t know how to order an investment property depreciation schedule.
As a Real Estate Professional, we believe you can increase investor awareness and your competitive edge by showing your clients how the property’s perceived value can be increased by purchasing a tax depreciation schedule.
It’s a win-win situation for all!
For example, an investor looking to purchase a brand new property for $465,000 with a potential weekly rental of $520 (appraised value) would generate a yearly rental income of $27,040.
Their yearly expenses amount to about $29,800.
So, without claiming depreciation, this investor is going to be running at a loss.
However, their Real Estate Agent accessed the Duo Tax depreciation calculator to help estimate what they could potentially claim before purchasing a depreciation schedule.
The investor’s year one estimate amounted to $11,140 with a tax refund of around $2,210 – meaning that the investor could go from a negative cash flow scenario to a positive cash flow scenario.
How Do Depreciation Reports Help Property Managers?
Property managers play an important role in the success of an investor’s property portfolio. Your expertise can go beyond just achieving the best rental income for your client. You can encourage them to aim for good rental income and positive cash flow!
So, understanding tax depreciation means that you can guide your clients to claiming further tax deductions on their investment properties, reducing their taxable income and improving their cash flow.
Why Choose Duo Tax Depreciation Schedules?
We’re property investors for property investors.
We’ve assembled a team of tax depreciation experts to maximise tax-deductible claims on your client’s investment property.
We offer expertise by assessing eligible tax depreciation for investment properties that are new, old, renovated, completely refurbished or for commercial fit-outs and producing ATO-compliant reports.
We also offer our real estate and property manager partners access to an abundance of resources to help guide your clients on their investment journey and ensure that they’re getting the best possible returns.
With your depreciation knowledge, your clients can save more money in taxes and protect themselves against audits by lodging an ATO-compliant report to claim for depreciation on their investment properties during tax return season.