Effective Lives of Assets Rulings Shakes Up Property Depreciation Allowances
Property investors will see an extension to the effective lives of Plant & Equipment assets while others maybe reduced or deleted resulting from recent changes to the tax rulings for residential properties purchased from 1 July 2019. The effective life of an asset refers to the length of time an asset can be depreciated.
Newly built properties will be the most impacted, as investors can claim depreciation allowances for Plant & Equipment Division 40. Older or second-hand residential properties purchased after 9th May 2017 can claim depreciation on new equipment bought to improve the properties.
In total 32 items have been changed or added to the effective life asset list in TR 2018/4 as per Section 40-95 of the Income Tax Assessment Act 1997 for residential property owners (ANZSIC 67110).
“I have assessed the list and found the depreciation life of 16 assets has been reduced. A further 16 new items have been added to the list and are eligible for inclusion,” said Paul Mazoletti, National Director, Napier & Blakeley.
“Some investors will benefit from the new assets with extra items included in their tax schedules to depreciate over time. While other assets will have a reduced life; effectively improving the value of their assets to claim. Continue reading
Capex Planning Makes Property More Valuable
If you’re an Owner or Manager of commercial property, you may well now be planning budgets and setting targets for the year ahead and beyond.
There are a number of questions to be answered:
- Are there any priority issues that need to be managed?
- What needs to be repaired, replaced or improved?
- When do these need to be done?
- What could safely be deferred?
- How much will it cost?
- What will be the return?
Napier & Blakeley have developed software which enables the allocation of budget forecasts as well as the associated tax depreciation benefits that may follow. These forecasts can be viewed by individual asset, by level, or tenancy, by whole building and by whole portfolio, providing an holistic insight to manage expenditure and priorities.
The initial assessment process is made possible by our Services Engineers, Building Consultants and Quantity Surveyors who have current cost information to produce cost estimates and property tax depreciation reporting aligned to the commercial goals of your business and intentions for the property. Continue reading
