Investors do benefit a lot from the tax deductions they obtain when the value of their properties and investments depreciate over time. The net income is narrowed. Higher depreciation expense means lesser net income which also means lesser due in income tax obligation. Tax depreciation is really something good for investors.
The process to get depreciation benefits as an investor must be importantly observed to make the most out of them. Some investors do not fully maximize their merits because of settling for less and being too complacent about the date of claiming the tax deductions (which results to missing the exact date) and also about the Quantity Surveyor that they hire. Worse than that, some of them do not claim tax depreciation benefits, and here are 5 reasons that make them do just that!
—— “It’s only for new things.”
Many investors just let the tax depreciation benefits pass them by because they own old properties. They believe or were told that only properties constructed recently or at a specified time are eligible to claim tax deductions.
With new properties, there’s a high chance of claiming more, however, that does not mean old properties are beneficial no more. All properties, whether old or new, depreciate, thus, all are entitled to claim their perks.
—— “I don’t understand how it goes.”
Others do not simply understand the process of tax depreciation and how beneficial it can be. They are not aware of what they can claim using depreciation.
Investment properties are either Plants and Articles or Capital Works. The first one includes removable assets like couches and carpets, while the latter includes the building structure and the fixed items within it such as the roof and doors. Every asset corresponds to a specific value.
Information about those properties and more, especially the crucial quantitative values must be understood by investors, so that they’ll pay attention to tax depreciation, give time for it and claim their benefits.
—— “Do I really need a Quantity Surveyor?!”
Some investors believe that their accountants can work on tax benefits that they can acquire. They do not know that legally, there’s only one type of people allowed to work on tax depreciation, and they are Quantity Surveyors. They are trained specialists in the field, as they are authorized and recognized by the Australian Taxation Office.
Quantity Surveyors work on creating Tax Depreciation Schedules, reports highly required in order to claim depreciation benefits. Depreciation schedules must be detailed and accurate. Accountants cannot perform that work for investors. Only Quantity Surveyors since they have the necessary skills and qualifications under proper education and knowledge about Quantity Surveying. They’re the best and considered as the only ones who can fully make investors understand Tax Depreciation Schedules and can create them.
—— “I don’t know that there’s such thing.”
Sadly, some investors do not know that Tax Depreciation exists. Maybe when it’s explained to them, they were not paying attention or maybe they didn’t know that “Tax Depreciation” is the term. Or maybe, they totally do not know that there is such thing. They do not know that taxes are not always taking money from them.
Some find out about them only recently, and maybe, some also find out about it accidentally. Tax Depreciation is a “new” term for many, and that’s one of the most common reasons why they do not enjoy the claimable benefits of Tax Depreciation.
Because Tax Depreciation is indeed an uncommon term, many do not get and maximize the use of their property investments. That is why being informed is initially important for it is where making efforts to learn more about Tax Depreciation starts. This matter is not easy to understand, but do know that for investors [and even non-investors], it is essential to have knowledge regarding Tax Depreciation because if not, there are many good things that end up being overlooked and missed out.
Nicole Ann Pore is a daytime writer for Depreciator, an Australian-based company specializing in and providing Tax Depreciation Schedules for a substantial number of businesses. She writes pieces that help cover people’s need for information regarding taxes, investment and financial planning. | Nicole graduated Cum Laude from De La Salle University Manila, Philippines with a Bachelor’s Degree in Communication Arts.