Negative Gearing – Property Depreciation get it while you can!
In recent years there has been much debate about the pros and cons of negative gearing in the property industry and what impact removing it from the investment horizon would make.
We get a call every day from clients about this and clearly it is an issue that will affect the investment activity of some investors in the property market.
Whilst recent announcements from politicians on both sides of politics have highlighted that negative gearing is in the cross hairs, it remains to be seen what might actually happen going forward.
We can however be sure (at this stage) that there are no moves afoot to make any changes to claiming property tax depreciation deductions on your investment property, so you can still enjoy these substantial benefits that will significantly enhance your investment cash flow and after tax return going forward. Continue reading
Tenants Leftovers – Landlords Bonus!
If vacating tenants have left fixtures and fittings in your investment property, some of them may be eligible for depreciation claims. KY Pih from Napier & Blakeley’s Brisbane office explains the principles.
Property tax depreciation has two parts:
(1) Division 40 items are plant and equipment like carpets, vinyl, lights, air conditioners, curtains, fire equipment, and hot water units; and
(2) Division 43 items are generally considered the ‘shell’ of the building and include things like walls, floors, ceilings, pipework, ductwork, etc.
If a tenant vacates and leaves Division 40 items behind, unfortunately the landlord is not entitled to claim depreciation on them because they did not incur the original expenditure. However, the landlord can continue to use the fitout to generate further income. Continue reading
