This article contains a number of relevant Australian tax updates for people who own real estate investments. Your tax accountant should be aware of these, but as an property investor it’s good to know what tax dedications and available and how they may affect your tax situation.
Claim 100% for this year or depreciate?
Taxpayers are entitled to claim the cost of repairs and maintenance immediately, but there are other adjustments to a property which are classified as ‘capital works’ and can only be claimed over a number of years.
“For example, if the guttering on your property is damaged in a storm, and you replace the part that is damaged, you can deduct that immediately,” says Karen Foat, Assistant commissioner at the ATO.
“However, if you replace the whole guttering, that’s a capital works, it’s a structural improvement. And you can claim that at a rate of 2.5 per cent for 40 years,” she said.
Source: Accountants Daily sister publication, Smart Property Investment, December 2018.