A tax depreciation expert has said approximately 80 per cent of landlords are not making the most of their properties' depreciation deduction.
BMT Tax Depreciation director Bradley Beer told Residential Property Manager that as a property manager all of your clients are landlords that are investing in property purely to make money now and in the future.
“The items in a property or in a building wear out over time and the tax office lets us claim a deduction based on that wear and tear, and effectively it means more cash in your pockets,” he said.
“As a property manager, just knowing there is some money there and knowing you can get some sort of indication of how much that money might be [is important].
“That way a landlord can potentially take that off to the accountants, ask some questions about their tax return and just make sure that investment is working as hard as possible for them to get them the maximum return,” he added.
Mr Beer said it is important property managers have a good knowledge of a depreciation schedule.
“Knowing that when you renovate there are more deductions, knowing that new property gets more deductions, but knowing that there are deductions on any kind of investment property that can be assessed before you spend any money to see how much money will be there is really important,” he said.
“Probably another important thing for renovators is understanding what depreciation means.
“If you are a renovator or your clients are going to renovate and they throw things away then they are going to be able to scrap some stuff, so they need to talk to the specialists before they do these renovations; not just after, like a lot of people seem to do,” he explained.