Property investors: did you get your tax deduction?

In a recent article by Anthony Keane, he advised that many of Australia’s 2.1 million rental property owners are missing out on thousands of dollars of tax deductions each year by failing to correctly calculate depreciation.

New figures from BMT Tax Depreciation show that since tax time started on July 1, its investor clients have achieved depreciation claims averaging $8893 per property. That’s much more than the latest Australian Taxation Office records showing average annual claims totaling $3600 for capital works (construction costs), plant and equipment as many investors failed to seek adequate advice.

“Thousands of dollars of legitimate tax deductions are being left on the table each year,” he said.

Big ticket items such as ovens and carpets often provided the biggest deductions, but investors should not ignore smaller items worth less than $300 — such as bins and smoke alarms — that could be claimed in full immediately. Capital works deductions were often $5000 in the first year.

Depreciation made owning rental properties more affordable, especially in the early years where there were the most cash flow pressures.

New rules introduced last financial year have taken some of the shine off depreciation deductions, but thousands of dollars can still be claimed by many property investors.


Originally published as This mistake can cost thousands at tax time