Tax time is here again!
The end of the financial year is upon us and we want to make sure you’ve got all your property tax bases covered!
If during the past few or this current financial year you’ve owned (or updated) an investment property and earned an assessable income from it then you are likely entitled to tax deductions and allowances or otherwise commonly called property tax depreciation.
For over 30 years Napier & Blakeley has analysed many thousands of properties, preparing property tax depreciation schedules for owners of virtually every type of property ranging in value from a few hundred thousand dollars to billions. There are well in excess of three million property investors within Australia and the majority of these owners are not likely to fully maximise available deductions, which can significantly affect and increase their after tax yields and cash flow.
In a recent analysis of a five year old commercial office building with a purchase price of $5m, a land value of $1m and an income of $500,000 we found the following;
If you claimed no depreciation and building allowances, your after tax income at the following rates would be:
| 47% = (highest individual tax rate) | = $265,000 |
| 30% = (company tax rate) | = $350,000 |
| 15% = (superannuation fund tax rate) | = $425,000 |
However, if you did claim the available deductions and allowances your after tax income could be greatly increased:
| 47% = $347,000 a 31% increase in after tax return |
| 30% = $409,000 a 17% increase in after tax return |
| 15% = $455,000 a 7% increase in after tax return |
There are some questions you should ask yourself about your properties:
1. Have you acquired an investment property of any age, type or in state of repair?
2. Have you completed any construction works?
3. Have you completed a fit out?
4. Has a tenant left your property and you have inherited their fit out?
5. Has a tenant left your property and you have removed their fit out and made good?
6. Have you paid any $ towards a tenant fit out?
If you have answered yes to any of these items and have not yet had your property tax depreciation schedules updated, you may well be missing out!
Contact Napier & Blakeley today and ensure that your position is maximised at tax time!
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