Fortunately, it isn’t all doom and gloom, and for owners in strata complexes, tax time could present a significant financial opportunity.
By understanding the depreciation allowances for common areas, shared assets, and individual units, property owners can optimise their tax deductions, increase cash flow, and enhance their overall investment proposition.
“Strata property owners may claim deductions on building structures on common areas, foundations, walls, roofs, and common facilities such as lifts, swimming pools, gyms and more,” said Luke Downie, Head of Realmark Strata.
“Deductions can also be made over removable assets within a property, such as carpeting, air conditioning, appliances, etc.”
“This allows owners to offset the reduction in value of their assets against their taxable income, increasing cash flow and return on investment.”
However, navigating depreciation incentives can be complicated and it’s important to ensure compliance with ATO rules and regulations.
Acumentis is a trusted provider of high-quality, independent property valuation and advice.
National Director of Advisory, Nathan King, recommends engaging a suitably experienced quantity surveyor and registered tax agent to complete the tax depreciation report for strata properties to ensure all possible depreciation deductions are allowed for in accordance with the current tax legislation.
“Depending on the age, type, size and fixtures within the property, a typical tax depreciation deduction can equate to anywhere from $3,000-$15,000 per year,” said Mr King.
“Depreciation tax deductions are available to residential property investors whose investment property was built after 15 September 1987, commercial properties when built after 20 July 1982 and any refurbishments, renovations, or improvements from 27 February 1992.
“Remember that the structure of your investment property has an effective life of 40 years! If you have owned your investment property, which was built post September 1987, then it is very likely you are missing out on thousands of dollars’ worth of possible tax deductions.”
For more information and tax time advice for strata property owners, please contact:
Luke Downie – Head of Realmark Strata – ldownie@realmark.com.au
Nathan King – Acumentis National Director – Advisory, State Director Wa Operations nathan.king@acumentis.com.au