Depreciation: Under income tax law you are allowed to claim deductions for expenses incurred in earning your assessable income. Some expenses, such as the cost of acquiring capital assets are not allowable. Capital assets are those that provide a benefit over a number of years – for example, in the case of investment properties, appliances, hot water services, light fittings, curtains and carpets.
The value of such assets gradually reduces over time as they approach the end of their effective lives. Assets that lose value in this way are said to depreciate. In recognition of this fact, the cost of capital assets used in producing assessable income can be written off over a period of time as a tax deduction.
Special building write off: Additionally you may deduct certain kinds of construction expenditure. In the case of residential rental properties, the deductions are generally spread over a period of 25 or 40 years.
Deductions based on construction expenditure apply to capital works such as building or an extension, eg adding a room or garage. Deductions are allowable only for the period the property is rented or is available for rent.
Reports: Our reports will provide you with appropriate values for both tax depreciation of plant and articles and for the special building write off. If required, we can provide a schedule indicating the annual amounts of deductions for the next ten years.
Developers: We are pleased to provide property developers with indicative schedules of tax deductions for their marketing purposes.