Search for the smaller items that make a significant difference to an investor’s cash flow.Four out of every five property investors are missing out on potentially thousands of dollars in tax rebates, by forgetting to claim on everyday household items.
Shower curtains, smoke alarms, lawnmowers, roller-door motors, microwaves and garbage bins are among the dozens of minor objects in the average rental home that landlords routinely forget to claim depreciation on.
New research conducted by tax depreciation specialists BMT has revealed that figuring in these assets can increase the cash flow generated by a property by around 15 per cent.
“Property investors tend to focus on the larger-ticket depreciation items available, such as the structure of the house and large plant items in the house,” said BMT managing director Brad Beer.
“However it’s often the smaller items which can make a significant difference to an investor’s cash flow.”
Beer, who recommends investors engage a qualified quantity surveyor to create a deprecation schedule for their property, says investors can often name a few depreciable items, such as carpet, hot water systems and light fittings. “But a range of less obvious items, such as garbage bins, exhaust fans or smoke alarms, are often overlooked,” he says.
BMT conducted their survey among their 190 staff Australia-wide, asking them which items their clients found “very surprising” when told they could be depreciated or which they’d missed out in their DIY filing of depreciable items. The company has more than 8000 regular referrers to their business, including property professionals and accountants who recommend their services to property investors.
They found the most common assets never claimed for were items like garden sheds which have, on average, a depreciable value – the purchase price of the item minus its salvage value which can then be claimed for over its useful life – of around $855 and ceiling fans ($265) right down to smaller expenses like shower curtains ($30). Frequently missed were other assets like solar-powered generating systems ($5500), automatic window shutters ($800) and intercom systems ($745).
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