The new financial year is just week’s away, but there is still time for commercial property owners to get their tax deduction ducks in a row, urges leading quantity surveying firm, BMT Tax Depreciation.
It’s a fiction that older properties can’t attract some depreciation deductions, advises BMT. The Australian Taxation Office (ATO) places restrictions on claiming capital works deductions (depreciation for the structural elements of a property such as roofs, walls and floors. However, BMT advised there are no date restrictions for depreciating plant and equipment assets.
To add a layer of complexity, deductions for plant and equipment are dependent on the asset’s condition and quality. As these items will have varying ages due to different repair dates, there might be significant tax claims that have been overlooked previously. In a nutshell, if the building itself is too old for a depreciation claim, the owner can generally still claim for plant and equipment assets contained within, notes BMT.
If your property has received a new fit-out this tax year, you may be able to claim some depreciation benefits as the owner. That said, a tenant can also make claims too. A commercial fit-out is a complex tax area, and whether you’re the lessee or lessor, you’d be best served seeking the advice of your accountant.
BMT advises new commercial property owners to start claiming depreciation as soon as they take ownership. By waiting to make claims, BMT says, [owners] are missing out on valuable cash flow that can be particularly beneficial. So, the advice is to get a depreciation schedule report completed when the property settles to find out what claims are available. Better still, the depreciation schedule fee is fully tax deductible this tax year, if the quantity surveyor can complete the schedule before June 30.