Maximize Your Deductions with Taxly.ai Tax Depreciation Schedule

1. Maximize Your Deductions with Taxly.ai Tax Depreciation Schedule Safe & Secure What is Tax Depreciation? Tax depreciation is a tax deduction that property investors can claim for the natural wear and tear of a property and its assets over time. It reflects the declining value of the property’s structure and the assets within it. In accounting, this is recognized as a decrease in the value of an asset over its useful life. . www.taxly.ai

2. Why Claim Tax Depreciation? • Reduce Taxable Income: Claiming tax depreciation lowers your taxable income. This can significantly reduce your tax bill, effectively putting more money back in your pocket each year. • Improve Cash Flow: By reducing your tax liability, you effectively increase your annual cash flow. This can be particularly beneficial for property investors who rely on rental income. • Maximize Investment Return: Depreciation is a non-cash deduction – it doesn’t come out of your pocket on an annual basis. Claiming it ensures you’re maximizing the return on your investment property. • Property Value Appreciation: Even as your property appreciates in market value, you can still claim depreciation on the building and its fixtures and fittings, enhancing the investment’s profitability. www.taxly.ai

3. Who Can Claim Tax Depreciation? • Individual Property Investors: Individuals who own investment properties, such as rental homes or commercial properties, are eligible to claim tax depreciation. • Companies: Companies that own investment properties can claim depreciation on these assets. This includes properties used for business purposes or as rental investments. • Trusts: Trusts, including discretionary trusts and family trusts that hold investment properties, can claim tax depreciation for those properties. • Self-Managed Superannuation Funds (SMSFs): SMSFs that invest in property can claim tax depreciation on their investment properties, provided these investments comply with the superannuation laws. www.taxly.ai

4. What to Claim? www.taxly.ai

5. Who is Eligible? To check your eligibility to claim tax depreciation on a property in Australia, you need to consider several key factors: Type of Property: Generally, tax depreciation is available for investment properties. This includes both residential and commercial properties. Your own home, or principal place of residence, is not eligible for tax depreciation deductions. Date of Construction: The construction date of your property affects your eligibility for capital works deductions (Division 43). For properties built after 15th September 1987, you can generally claim these deductions. The rate and period of depreciation can vary based on the exact construction date. www.taxly.ai

6. The Bottomline Tax depreciation is a valuable tax deduction for property investors, as it reduces taxable income and improves cash flow. It’s applicable to various entities owning income-producing properties, and it encompasses claiming on both the property’s structure and its fixtures and equipment. To ensure accuracy and compliance with Australian Taxation Office (ATO) guidelines, it’s advisable to get a depreciation schedule prepared by a qualified Quantity Surveyor and to consult with a tax professional. www.taxly.ai

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