The latest data shows how much real estate investors can refund from the tax bureau for one type of claim without any further cash outlays—the number is in the thousands.
According to data released by the Australian Taxation Office this week, depreciation is the second highest requirement raised by real estate investors, with an average of US$3,885 in the 2018/19 financial year, with the highest requirement coming from loan interest (average US$9,640). Corporate fees ranked third (US$2,448), followed by land tax (US$1,931) and property agency fees (US$1,281).
Real estate investors in 2018/19 claimed:
Loan interest (average US$9,640)
Depreciation (average $3,885)
Corporate fee ($2,448)
Land tax ($1,931)
Property agency fee ($1,281)
According to Bradley Beer, CEO of BMT Tax Depreciation, the benefit of depreciation is that there is no need to pay more money to claim compensation.
“For the 2018/19 fiscal year, the average claim for capital works deductions and BMT for plant and equipment was approximately $8,300. The next fiscal year showed similar results,” he said.
“Unlike other tax-free items such as loan interest and expenses, investors do not need to pay any fees to apply for depreciation. It claims that it can bring thousands of dollars back to investors’ pockets every year.”
He suggested that real estate investors find a simple way to reduce their tax burden before June 30, including prepayment of loan interest, taxation and insurance, and develop a tax depreciation plan-the cost of which is also claimable.