Existing Investment Property
Tax depreciation for existing or older property
It’s true that new property yields more depreciation and therefore more tax benefits. However, existing property and even some older property can still yield thousands of dollars in tax savings each year. Be sure to consult us about your depreciation schedule as soon as possible, even if you’ve already owned it for a few years. There could still be depreciation benefits due to you.
Diminishing Value and Prime Cost
You can choose between two methods of scheduling depreciation over the life of your asset: Diminishing Value and Prime Cost. Our tax depreciation schedules will include both methods. The most suitable method is dependent on your current property portfolio and tax situation. Please remember to discuss these with your accountant.
Case Study – Existing House
Purchase price: $1,750,000
3 bed, 1 bath, 1 garage
This 3 bedroom house, although aged, was recently renovated with new carpets, restored timber floors and paint work are improvements which are tax deductible.
In addition, capital works in this property includes the structure of the building, the swimming pool and the garage. These will be included for tax depreciation calculations.
Post purchase improvements and renovation
In this case, our client decided to make improvements to the the property such as fencing and paving just after we provided them with a depreciation schedule
We took the time to account for all the post-purchase expenses and produced a separate post-purchase addendum schedule at no additional cost to the client, adding a further $1,297 to his tax savings to his current savings of $34,287 over ten years.
Tax savings over 10 years: $35,584
