There are three types of income that are taxable – income from salary and wages, business, and capital gains. Capital Gains Tax (CGT) refers to income obtained from the sale of assets. It is levied when the sales price is higher than the purchase price. In some cases, it is also imposed on rental property. However, there are provisions to claim for tax deductions on residential and commercial rental properties for which proper records are necessary. This way, you can increase your rental property returns and maximise tax deductions. If you are unaware of how to claim for tax deductions for rental properties, contact the Melbourne accounting firm.
There are several ways to claim tax deductions for your rental property. Having no knowledge about the same affects the returns on the rental property massively. The only way to save on tax and maximise income is through taking help of the accounting services Melbourne CBD. If you have an investment property, one of the advantages you can have for tax deduction is through ‘depreciation.’
The Australian Taxation Office accepts claims for depreciation on anything you have purchased along with and at the time of property purchase. As your property is a tangible asset, it is likely to suffer wear and tear over the years. With this in mind, it is wise to get the property inspected by a Quantity Surveyor. The inspection report will let you know everything that is claimable. Call the tax accountants Melbourne CBD who can arrange property inspection for you.
As you have invested smartly in a property, you must know about its depreciation value as well. You can be on the right track towards maximising deductions by getting the report in the same year the property was purchased in. The report will specify how your property will be depreciated from the year of purchase until the coming 40 years.
Another important thing you have to know is that depreciation on tangible assets for residential purpose is applicable only if the property is purchased after July 18, 1985. In case you are seeking tax deductions for your commercial property, check that it is purchased after July 20, 1982. Any additional work such as fencing, landscaping, and paving done on the structure done after February 1992 is also eligible for capital works deduction.
How much depreciation will be calculated considering the type of building, its age and additional work done on it. You can also get a Quantity Surveyors report in case you are planning for renovations or extension for your older property. The fees you will be paying to the Quantity Surveyor will also fall under the bracket of tax deductible as per the age of the building.
To know how to go for increasing rental property returns and tax deductions, contact Melbourne CBD accountants and make your investment property count.