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Depreciation differences: old versus new residential properties

By the resi financial blog team, 24 February 2015

Finances

Property depreciation is a non-cash tax deduction available to the owners of income producing properties.


As a building gets older, items wear out – they depreciate. The Australian Taxation Office (ATO) allows property owners to claim this depreciation as a tax deduction. Depreciation on mechanical and removable plant and equipment items such as carpets, stoves, blinds, hot water systems, light shades and heaters are all valid deductions. There are also deductions available for the wear and tear of the structural element of a building, commonly called a capi ...

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Two depreciation methods to pick from to suit your investment strategy

By the resi financial blog team, 03 February 2015

Two depreciation methods to pick from to suit your investment strategy

The Australian Taxation Office (ATO) allows investors to choose between two alternative methods of claiming depreciation on plant and equipment assets. These are the diminishing value and the prime cost methods of depreciation.


When an investor makes their depreciation claim, they can choose only one of these methods, so it is important for them to understand how this choice will affect their investment returns.
Both the diminishing value and the prime cost methods claim the total depreciation value available over the life of a property. However the two me ...

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Four reasons investors should claim depreciation in the New Year

By the resi financial blog team, 06 January 2015

Four reasons investors should claim depreciation in the New Year

As we enter a New Year, many investors might be formulating their annual New Years resolutions. 

Investors often think about the ways they can reduce the costs of owning an investment property and wonder how they could boost the cash flow earned. However when they do so, the deductions they can claim via depreciation are not always at the top of their list when it comes to saving money. 

Around 80% of investors still do not maximise the depreciation deductions available from their investment property, so this is a very good reason why investors should ...

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Guest blog: Invest smarter, claim property depreciation

By the resi financial blog team, 26 September 2014

Brad Beer

Smart investors claim property depreciation. Here are a quick few points about depreciation investors should be aware of:

* Investors can claim an average of $5,000-$10,000 in deductions on properties in the first full financial year
* Tax returns for the previous two financial years can be adjusted if you have not been claiming depreciation
* Every investor shou ...

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Guest Blog: Depreciation for renovations made easy

By the resi financial blog team, 30 June 2014

Tax depreciation for renovations

Understand scrapping

Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may be entitled to claim the remaining depreciable value for the items being removed as a tax deduction in that financial year.

Get a “before renovation” tax depreciation schedule

Arranging a tax depreciation schedule before completing renovations will save you time ...

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