It’s Tax Time! What Else You Didn’t Know About Maximising Tax Depreciation Part 2

Justine: Hi, my name’s Justine. I’m from Investors Edge Real Estate. Thank you for watching this short video. I’m back here again with Brad Beer, from BMT Tax Depreciation.

Hi Brad, thanks for being here. Brad, with the tax year coming up, it’s really good for investors to know what happens if they haven’t actually claimed yet. Can they go back and claim to prior?

Brad: It’s a very interesting question. We’re coming up with the tax year. It’s time that you’re going to think about doing your tax return. Firstly, if you do it before the end of June, then at least our fees are also deductible in that. Going back, if you don’t pay your tax, the tax office will kind of find you and make you pay it and it kind of works for you as well. If you haven’t done this properly before you go and do it again and mess it up and miss out on things, you can look at it and actually amend your last two tax years as well and get some more money back for what you potentially have missed out and fix it up–which is great. The tax office likes to pay you some money back.

Justine: That’s great. It’s what we want to hear. How does it work, Brad, with our investors out there that are renovating? Can you claim tax from a property you’ve renovated?

Brad: Something that happens when you renovate is that you actually throw a bunch of stuff away and some of that stuff actually still has some value. If you’re a renovator, you want to call us first or call the quantity surveyor first and say, “I’m about to renovate and there were things in here.” You’ve been depreciating them or hopefully you’ve been depreciating them and then when you throw them out, claim the rest of the value instantly in that year. Then you start depreciating the new things, obviously because you’re putting new stuff in there. Get a decent amount of deductions for those things that you throw away or scrap through that renovation process.

Justine: Great!  Brad, another question I had, I know a lot landlords out there think that their accountants deal with this. Why should they be getting you involved?

Brad: It’s a regular question that you probably get all the time and I see it all the time. The answer to that is most of the time, the accountants that say, “Call and get a quantity surveyor to do it.” We work alongside the accountants. We’re specialists just in the depreciation and maximising that number. We’re also recognised by the tax office to estimate the construction cost of the building because depreciation has a relationship with the construction costs. Then the ATO says, ”We want someone who knows about construction costs,” which is quantity surveyors. We work alongside the accountant, give our reports to them so they can put that number in the tax return with all the other numbers they pull together.

Justine: Brilliant!  That definitely sounds like an easy option, so thanks, Brad.

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