The last time we made a change to our Depreciation Schedules it was in response to the changes introduced in the 2017 Housing Tax Integrity Bill.

This time we’ve acted on feedback from the accountants who use our schedules. We believe this change will save accountants time and make our Depreciation Schedules a little easier to use.

A few important points about what we haven’t changed. We understand you’re used to a certain format and finding key information on certain pages.

• All the tables and graphs are on the same pages
• Existing figures in our tables and graphs stay the same (this is additional information)
• Our CSV files are not affected by this change

What has changed with our Depreciation Schedules?

On Page 8 of our Depreciation Schedules you’ll find the summary table that most accountants will use when lodging their clients’ returns with the ATO.  This page lists the Diminishing Value Depreciation figures for the Depreciating assets (or Division 40) in the investment property and the yearly building (Division 43) Depreciation for the building. Previously we provided a single Total Depreciation figure for each year.

Now, we provide additional yearly totals for the assets (Div 40) and the building allowance (Div 43) in the same table.

Below you’ll see see the new Div 40 Depreciation & Div 43 Depreciation totals highlighted in red.

How is the total Div 40 Asset Depreciation Calculated?

The total Div 40 Depreciation is calculated by adding the totals for the Depreciating Assets, Common area assets, Assets in the Low Value Pool, and common assets in the low value pool. Further information on those is below:

• Depreciating Assets – These are the depreciating assets (non-structural items e.g. kitchen appliances, curtains and blinds, carpet, hot water etc) contained in the investment property that are not located in a common area or the low value pool.
• Common area – These are assets located in the common areas of a strata managed property (normal apartments, townhouses, and villas) that are not in the low value pool. This would typically be items such as gym equipment, lifts, building security systems, fire services etc.) The owner is entitled to depreciate the apportioned value of these as laid out in the unit/lot entitlement of the Strata Plan.
• Low Value Pool – These are the Low Cost Depreciating Assets with a starting value between $300 and $1000 that aren’t in the common areas.
• Common area – The second common area row is for Low Cost Depreciating Assets that are located within the common areas of the building. This can include items like smoke detectors, sensors, cameras, etc.)

 
Email us enquiries@depreciator.com.au or call us on 1300 66 00 33 if you have any questions.

This article was provided by
Simon Harris – Managing Director of National Buyers Agency, Providence Property Group

When buying property, the title is the place to look for the essential details pertaining to what you are actually going to own if you make the purchase and any conditions you need to be aware of. If you’re in the market for an apartment, unit or townhouse, the property you consider may have a strata title. Understanding what a strata title property is and what it means for you as a property owner is a must, so let’s get the facts.

What Is A Strata Title?

Any property you purchase will have a title, and a strata title is simply a type of title that is very common in Australia, especially when it comes to units, apartments, and townhouses. In fact, any property that has shared space.
Interestingly, the concept of strata titled property is an Australian-designed scheme. It has been widely celebrated as a property innovation and proven so effective that it has been replicated in countries across the world.

Own Your ‘Lot’ Plus A Bit More

If you purchase a property with a strata title, you not only own the ‘lot’ that is your apartment, unit or townhouse, but also a share of the building’s common areas too.
Put it this way — you’ll own a portion of a larger dwelling rather than a freestanding dwelling. You (unless stated otherwise) own the internal walls, ceiling, fixtures, carpet, courtyard, airspace and anything within the airspace of your purchased lot. You will also share ownership of the common property areas. This can include the driveway, parking area, gardens, lifts, stairwells and the external building such as roof and walls.

Strata Lets  You Share The Expense Of Upkeep

As part of owning a strata title property, you’ll likely contribute a levy to an owners’ corporation (body corporate for example), enabling all owners within the strata scheme to share the expense of the upkeep. This means that when it comes to maintaining gardens, the building, the driveway and other common areas, you will split the costs with others.

Worried about disagreements with the other title holders on what needs to be done and when? Most owners’ corporations have a fair process for decision making and for dispute resolution that keep things from escalating so ask about the owners’ corporation rules and regulations prior to purchase if you have concerns.

An additional benefit of strata properties that should be considered is this: your insurances for strata properties are usually lower. Why? Because many of your property’s maintenance and repairs will be cared for through a sinking fund that can be used for regular repairs and other unforeseen events.

Why You Could Benefit From Investing In Strata Titled Property

A strata titled property can be a valuable addition to your investment property portfolio or make an excellent place of residence. Due to a lack of understanding for the most part, some people can be a little hesitant to purchase a strata titled property, but this can work in your favour, allowing you to snap up a great piece of property to invest in. And strata titling won’t have any effect on your rental yield, so a strata titled property can be a lucrative long term investment.

Investing in a strata titled property may also help to reduce your tax bill at the end of the year. Most property investors know they can claim depreciation on the property as a tax deduction. What many are surprised by is that depreciation deductions for an apartment are often higher than a much larger house.

As we mentioned above you own a portion of the common areas. That means you’re not just entitled to claim depreciation on your apartment itself, but also the portion of the common areas. These common areas could amount to several hundred thousand dollars or more. Especially in upmarket highrise developments. Nothing to be sneezed at.

Frequently asked questions about Strata Title Property ownership

Can I Renovate?
You can renovate your strata titled property. Assuming your changes are within the guidelines of your owners’ corporation rules and regulations, it should be as simple as notifying the owners’ corporation and gaining approval from the majority.

Will There Be Ongoing Expenses?
You will likely pay an annual owners’ corporation levy or strata fee, however this is often money that you would have ordinarily paid for maintenance of your property’s grounds anyway.

How Much Will Strata Fees Be?
This can vary but it’s important to consider what the strata fees will cover. For example, Providence will not recommend a strata property if the strata fees cannot be justified by the included amenities.

What Do I Need To Consider Before Purchasing A Strata Title Property?
Exercise due diligence and look into the levies you would need to pay, any works currently planned or underway and by-laws that might affect you such as rules around parking or noise.

Disclaimer: This article does not take into consideration your personal circumstances or a particular property, it is general in nature and should not be considered as advice.

It’s been a year of confusion and disruption for property investors. We had the bushfires, and then that virus. We found a great summary from the ATO that has some great tips. Did you know that if you have deferred your loan payments, you can still claim the interest as a deduction this year? You can find the article originally published on the ABC News website by Nassim Khadem here:

Rental property owners that have had their mortgage repayments deferred due to COVID-19 can still claim the interest on their tax bills, the Australian Taxation Office (ATO) says.

Key Points

• The ATO is reminding Australians to claim interest and expenses only on properties that are genuinely for rent
• It says insurance payouts for lost income due to coronavirus or bushfires are taxable
• Deductions for vacant land are generally no longer available

But those that have been awarded insurance payouts for loss of rental income due to COVID-19, bushfires or floods will still be taxed on it.

The agency is also reminding people this tax time that, under laws which passed Federal Parliament last year, they cannot claim deductions for vacant land even if they are building it to rent out.

More than 2.2 million Australians claimed $50 billion in rental deductions in 2017-18.

The agency contacts about 150,000 taxpayers, or their agents, each year about their rental claims.

In 2017-18, more than 9,000 people either amended their returns themselves or had their returns amended by the ATO as part of an audit.

These amendments added up to more than $25 million clawed back by the agency.

Tax time is near, but don’t lodge too early
A close up of several $100 notes
The Australian Taxation Office (ATO) is advising people to wait until the end of July before lodging returns, in order to minimise errors.

Assistant Commissioner Karen Foat said the agency recognised the COVID-19 pandemic had placed property owners and tenants in “unforeseen circumstances”, but reminded taxpayers about what deductions were and were not available under the law.

Banks have been offering mortgage holders loan repayment holidays.

The ATO says that since the interest is still accumulating on the loan, it is a legitimate tax deduction for those renting out their property.

“In these circumstances, rental property owners are still able to claim interest being charged on the loan as a deduction — even if the bank defers the repayments,” Ms Foat said.

Many tenants have been paying reduced rent or ceased paying during the pandemic.

Ms Foat said people still needed to include rent as income at the time it was paid.

“If payments by your tenants are deferred until the next financial year, you do not need to include these payments until you receive them,” she said.

“While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return.”

Ms Foat said some owners may have rental insurance that covered a loss of income.

“It is important to remember that any payouts from these types of policies are assessable income and must be included in tax returns,” she said.

Limited deductions for holding vacant land

Ms Foat also reminded Australians that deductions for vacant land were no longer available.

Previously those holding vacant land could claim a tax deduction for the costs of holding the land if it was held for income-producing purposes, or if they were carrying on a business to produce income.

But in the 2018–19 budget the Federal Government announced that from July 1, 2019, it would limit deductions for expenses associated with holding vacant land to land that was used for a business or was available for rent.

“For the 2020 year, expenses for holding vacant land are no longer deductible for individuals intending to build a rental property on that land but the property is not yet built,” Ms Foat said.

“So, if you are building a rental property, you cannot claim the deductions for the costs of holding the land, such as interest.”

Ms Foat said the change also applied to land people may have been claiming expenses on in the previous year.

“However, this does not apply to land that is used in a business, or if there has been an exceptional circumstance like a fire or flood leading to the land being vacant,” she said.

The exception was for people whose rental property was destroyed in the bushfires and who were currently rebuilding.

“[In that case] you can claim the costs of holding your now-vacant land for up to three years while you rebuild your rental property,” Ms Foat said.

Airbnb for private use? You can’t claim interest deductions

The impact of the coronavirus pandemic has been severe on short-term rentals such as Airbnb.

Ms Foat said despite the cancellation of existing bookings for a short-term rental property, deductions were still available provided the property was still genuinely available for rent.

“We recognise that circumstances over the past six months have seen many short-term rentals see cancellations or sit vacant as a result of either COVID-19 or bushfires,” Ms Foat said.

But she said if owners decided to use the property for private purposes, offered the property to family or friends for free, offered the property to others in need or stopped renting the property out, they could not claim deductions.

“If a property is not genuinely available for rent, you need to limit your deductions to the days when it is,” Ms Foat said.

“If you are allowing friends or family to stay in the property at a reduced price, you need to limit your deductions to the amount of rent received.

“If you or your family or friends move into the property to live in it because of COVID-19 or bushfires, you need to count this as private use when working out your claims in 2020.”

But generally speaking, she said people renting out a property in the 2019-20 financial year who had their income disrupted by COVID-19 or bushfires would still be able to claim expenses as tax deductions.

Steer clear of common errors

Ms Foat also reminded rental property owners to avoid common mistakes.

These include people claiming deductions for travel to inspect their rental properties, claiming interest on loan money for living expenses or holidays and claiming capital works as a lump sum rather than spreading the cost over a number of years.

“Repairs or maintenance to restore something that’s broken, damaged or deteriorating in a property you already rent out are deductible immediately,” she said.

“Improvements or renovations are categorised as capital works and are deductible over a number of years.”

The agency has also clarified the rules regarding work-related expense tax deductions and has warned people to wait until July to lodge their tax returns in order to minimise errors.

And generally it has advised people to have good records.

“The number one cause of the ATO disallowing a claim is taxpayers being unable to produce receipts or other documents to support a claim,” Ms Foat said.

“Furnishing fraudulent or doctored records will attract higher penalties and may also result in prosecution.”

The expected fall in property prices has been much more gradual that many predicted. While there has been some reduced demand for property recently this has been offset by a lack of stock, so we have a flattening of the housing price curve.

Here’s a great analysis from Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital, recently published on the AMP Capital Website…

In the latest Coronavirus development from QLD there’s some clarification about how protections for tenants will work. Housing and Public Works Minister Mick de Brenni has advised renters will need to prove their loss of income before applying for protection from eviction.

Read more in this article from By Rachel Riga, George Roberts and staff of the ABC…

The Queensland Government has backed down on its coronavirus rental relief package after the real estate industry waged a public campaign alleging the measures favoured renters over landlords.

Housing and Public Works Minister Mick de Brenni said renters suffering financial difficulty due to coronavirus would have to provide evidence of lost income if they wanted to be covered by a freeze on evictions.

“They are that you’ve lost more than 25 per cent of your income, or that you’ve lost so much of your income that you’re paying more than 30 per cent of your income on rent and you can’t afford the other necessities of life,” he said.

“I can’t put a dollar figure on that … that’s why there is real complexity to develop a framework.”

The Real Estate Industry of Queensland (REIQ) had previously called for a rental deferment system so landlords could recover lost income.

Mr de Brenni said it would be up to renters and owner to sit down and work it out.

“That will be a matter for tenants and landlords to work out in the best interest of the long-term security of tenure for those tenants and the financial security of the property owner,” he said.

“We will have a system in place to support the owner and it will include full disclosure of the financial circumstances of a tenant through a conciliation process.”

The Government’s rental assistance package includes a six-month freeze on rental evictions, the ability to extend a lease for six months and a rental assistance grant of up to $500 per week for up to four weeks.

Mr de Brenni said the new guidelines would support landlords and tenants.

“We want to ensure the mum and dad investors out there, that this package takes into full account the concerns that they’ve raised over recent days,” he said.

“We know that for many of those mum and dad investors, they’re not rich, they’re not wealthy, they simply invested in a property for their family’s future.”

Mr de Brenni said renters would have to meet a high threshold if they wanted to break their lease.

“There are limited circumstances in which we will allow a tenant to break their lease with a week’s notice,” Mr de Brenni said.

Inspections would be able to take place if a landlord wanted to sell their property and there was no health risk.

However, if a tenant was self-isolating or in quarantine, a virtual inspection would be able to take place.

Property agents and owners would still be able to access the property for emergency and essential repairs, for example smoke alarm repairs.

The State Government announced a $20 million grant fund would be made available to support 7,000 households to assist with rental payments.

A special COVID-19 housing security committee would also be formed involving the REIQ, Tenants Queensland, the Queensland Council of Social Services, Q-Shelter and the Residential Tenancy Authority, to independently monitor landlords and tenants who needed to negotiated.

‘Share the pain’

The REIQ said the changes to eviction freeze arrangements and rent deferrals “share the pain”.

REIQ chief executive officer Antonia Mercorella said she was very happy with what she called a more balanced approach.

But she said she did not expect all landlords to be happy with the measures.

“I’m sure there will still be some owners who will take the view that it’s not their job to bear the loss and I’m sure on the other side there will be some tenants that will also be disappointed,” she said.

“But I think we’ve known from the very outset that this pandemic is causing pain and grief for all of us.”

‘There’s a power imbalance already’

Tenants Queensland (TQ) chief executive officer Penny Carr said Mr de Brenni’s latest announcement was disappointing.

Ms Carr said she was concerned about the people who could not negotiate rent reductions without having to defer a payment for later on.

“There’s a power imbalance already — you’ve got a process where you’re encouraging negotiations between the parties, which is the best way for it to happen, but at the moment there’s no way to determine those disputes via a third party,” she said.

“The person with less power — in this case it’s the tenant — is going to be at a disadvantage.

Ms Carr said landlords should also have to put something forward to show why they could not afford rent reductions.

“This is not anyone’s fault — we have got to try and find a solution that works for everybody,” Ms Carr said.

“We are not saying that rent should be reduced forever.

Ms Carr has called on Prime Minister Scott Morrison to drive the banks and lenders to contribute more.

Below is a collection of websites for each state that landlords will find useful in these Corona19 virus times. It’s important that you get your information from more credible sources than the media – much of what you read and hear in mainstream media is an interpretation by whoever is writing or speaking. And journalists sometimes get things wrong – yes, really. Your property manager should of course be all over this stuff, but they are pretty busy right now.

NSW:

https://www.fairtrading.nsw.gov.au/resource-library/publications/coronavirus-covid-19

Queensland:

https://www.rta.qld.gov.au/Forms-and-publications/Educational-resources/RTA-responds.html

South Australia

https://www.cbs.sa.gov.au/rental-advice-due-covid-19

Victoria

https://www.consumer.vic.gov.au/resources-and-tools/advice-in-a-disaster/coronavirus-covid19-and-your-rights

Western Australia:

https://www.commerce.wa.gov.au/consumer-protection/covid-19-coronavirus-consumer-protection-faq

Tasmania:

https://www.cbos.tas.gov.au/topics/housing/residential-tenancies-covid-19-emergency-provisions

The ACT:

https://www.covid19.act.gov.au/

The NT:

The NT Government website doesn’t have much, but this is something from the Darwin Community Legal Service which might be useful:

https://www.dcls.org.au/about-us/coronavirus-information/

Finally, we have some clarity for landlords negotiating this new Corona virus world. This is an explanation of the mandatory Commercial Tenancies Code. Landlords and tenants will be sharing the pain. For a landlord, claiming every tax deduction will be critical – and that includes depreciation.

Read more in the following article by Sian Sinclair of Grant Thornton.

After continued jostling with industry groups over the weekend, Prime Minister Scott Morrison today revealed the final details of the mandatory Commercial Tenancies Code for commercial and retail leases. This is generally in line with the update the Prime Minister gave last Friday.

The intention of the Code is to preserve the commercial leases in place and leave both the tenant and the landlord in a position to pick things up again once the period of hibernation is over.

Now agreed upon, the Code will be legislated and managed by the States and Territories and will be subject to binding mediation. The two core principles underpinning the Code will be good faith and proportionality, with landlords and tenants urged to work together on how to best manage rent relief going forward.

• Who does the mandatory code apply to?
  The code will apply to tenants with a turnover of $50m or less.
• Tenants that have experienced a 30% or greater loss in revenue.
• Tenancies where the tenant is participating or will participate in the JobKeeper program.
• What does rent relief look like?
  Landlords are expected to negotiate in good faith and ‘share the pain’.
• The rent relief should be proportionate to the reduction in turnover and should comprise waivers and deferrals.
• Waivers must account for at least 50% of the reduction.
• Any recoupment of deferred rent will be over the duration of the lease period or a minimum of 24 months. This means if a tenant has six months left on their lease, they should be offered a 24 month period to pay any deferred rent.
• Landlords cannot terminate a lease on the basis of non-payment, nor dip into bonds to cover unpaid rent. Those who choose not to engage may forfeit themselves out of the lease.
• Tenants are expected to honour their obligations under a lease (i.e. they can’t just walk away, which was one of the industry concerns when the initial guidelines were announced).

While the eligibility for JobKeeper is currently uncertain, those with rental arrangements that fall outside of the Code (generally turnover above $50m or less than 30% reduction in turnover) will need to negotiate with their landlords without the protection of the Commercial Tenancies Code. Interestingly, many landlords could find themselves offering significantly different lease concessions on a lease by lease basis, depending on which of their tenants are eligible for JobKeeper. A one size fits all approach does not apply, hence the message to negotiate in good faith.

We anticipate there will be additional information to come from the States and Territories about how this will be applied in each jurisdiction, as well as announcements of additional relief on land tax and rates – on the proviso this is passed on to the tenants.

The Prime Minister stressed that the banks will be key to making this work, and urged international banks operating in Australia to provide the same level of support as the national banks have to date. How the support of the banks can be formalised remains to be seen, particularly where international funding is involved. Mortgage payment deferrals are a cash flow inconvenience for banks and currently, these are only for facilities below $10m, so we would like to see some real support in the form of interest waivers or suspensions during any “rent-free periods” required under the Code. There isn’t a sharing of the pain unless the banks are forgoing some income – as with all other parties involved.

The Prime Minister confirmed that residential rent relief will be considered and implemented by each State and Territory and not by the National Cabinet.

 

The federal government have acted quickly with measure to prop up the economy as it battles the Corona virus. The directions to landlords and tenants hasn’t been very clear, though. Hopefully in the coming days there will be some clarity. One thing is for certain, though. Investors will want to claim every deduction they can – and that includes depreciation.

Read more in the following article reproduced from Greg Tacadena of Your Investment Property Magazine…

Tenants who have the financial capacity must continue to pay rent even with the moratorium on rental evictions in place, according to Housing Minister Michael Sukkar.

In a TV interview with ABC News, Sukkar said that the moratorium on evictions amid the COVID-19 outbreak does not necessarily mean that tenants can skip paying their rents.

“Unless you have an arrangement with your landlord that takes into account your financial circumstances, you are required to pay your rent. The moratorium applies to make sure that people do not find themselves without a home,” he said.

Sukkar assured that the national cabinet is exploring options and proposals to set a framework that can help landlords and tenants make an agreement about rental payments.

“To the greatest extent as possible, we want flexibility. We want landlords and tenants working it out for themselves,” he said.

Adrian Kelly, president of the Real Estate Institute of Australia, said Sukkar’s message should clarify the issue about rents and the moratorium on evictions.

“A moratorium on evictions doesn’t mean rent is not payable, it is. If circumstances mean that payment in full is not possible it is a holding off from payments, not a cancellation,” Kelly said.

However, Kelly urged the state governments to step up and provide assistance to Australians to help them continue to pay their bills, including rent.

“The rent cash flow ensures that everyone wins and I unashamedly include the real estate agent in that. We need income in order to continue to employ our property managers who are at the coal face of looking after both tenants and landlords,” he said.

Furthermore, Kelly said it is counterintuitive just to leave tenants and landlords to sort things out themselves.

Sukkar said in the ABC News interview that the national cabinet is already considering some proposals to set a standard.

“I’m sure there will be a framework of minimum standards and requirements. It’s not in any landlord’s interest to lose a great tenant who is going through a short-term difficulty. I’m sure landlords understand that. But we need to put in some minimum standards,” Sukkar said.

In an earlier statement, Ben Kingsley, chairperson of PICA, landlords must also be provided with assistance from the government. PICA outlined some of their suggested policies that would help landlords amid the outbreak.

“Let’s be clear — landlords understand the situation. The vast majority are hardworking, average Australians who own just one rental property,” Kingsley said.

Chris Jordan from the ATO recently announced that property investors and their deductions were next in his sights after the success of his crackdown on work-related expense.

Apparently, in a test audit of 300 property investors, 90% made errors. With a success rate like that, it’s no surprise the ATO are keen to roll their sleeves up and tackle investors seriously. Read the full article by Jessica Irvine published in The Sydney Morning Herald below:

The $47 billion in deductions claimed against rental income every year will face tougher scrutiny from the Australian Taxation Office after more than 300 audits of investor returns revealed errors in nearly 90 per cent of cases. More than 2.1 million Australian taxpayers declare rental income to the Tax Office each year, but a check of returns has unearthed widespread errors in the popular tax deduction.

“A lot of people are getting things a little bit wrong, which adds up to a lot,” Tax Office commissioner Chris Jordan told The Tax Institute’s national convention in Hobart on Thursday.

Mr Jordan warned that property investors were now his “next focus”, following a successful crackdown on inappropriate work-related expenses, which has yielded $600 million in extra tax revenue. For the first time in nearly a quarter of a century, the average work-related expense claim fell by, on average, about $130 a year for the past two years.

They will look at interest wrongly attributed and erroneous claims on holiday houses

Property owners can now expect to receive the same attention from the Tax Office.

“Our next focus is rental income and deductions,” Mr Jordan said, revealing the random audits had unearthed myriad errors by property investors.

“We’re seeing incorrect interest claims for the entire investment loan where it has been refinanced for private purposes, incorrect classification of capital works as repairs and maintenance, and taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent.”

Property owners declare about $44 billion in rental income and $47 billion in costs associated with property ownership – including interest on loans – meaning the nation’s landlords are, on average, “negatively geared”, with expenses exceeding rental income. These rental losses can then be used to reduce tax payable on other income.

“And when you consider that rentals include over 2.1 million taxpayers claiming $47.4 billion in deductions, against $44.1 billion in reported income, you can get a sense of the potential revenue at risk,” Mr Jordan said.

Of the nearly 2.1 million taxpayers who declared an interest in a rental property in 2015-16 – the latest year for which statistics are available publicly – 1.3 million reported a net rental loss for the year. Just over 800,000 were “positively geared”, with rental income exceeding expenses.

The ranks of positively geared investors swelled over the first five financial years of this decade, the figures show, thanks to a combination of falling interest rates and higher rents.

Declared rental income rose sharply, from about $34 billion to almost $42 billion. Declared interest expenses fell from about $24 billion to $22 billion over the five years.

But “other rental deductions” rose sharply, from $15 billion a year to $20 billion, and it is these deductions that are now in the ATO’s firing line.

In the May 2017 budget, the Turnbull government cracked down on the ability of landlords to claim the cost of travel to their rental properties as legitimate deductions, yielding half a billion dollars in revenue over four years.

Property investors also face a further tax crackdown under a Labor government, which has promised, if elected, to stop the landlords of newly purchased, established dwellings from being able to claim net rental losses against their other assessable income. Property investors who buy newly built properties will still be allowed to negatively gear them.

Labor’s changes would be grandfathered, so that all owners of existing investment properties will be able to continue to tax deduct net rental losses until they dispose of the property.

As this article demonstrates, the ATO are keen to ensure property investors are only claiming deductions that they’re entitled to under the current regulations. It’s likely incorrectly claimed Depreciation deductions may also dray attention.

The treatment of second-hand Assets in residential properties will be a special focus – remember, commercial properties were not affected by the 2017 changes.

It has been almost 2 years since the changes to the treatment of Assets were announced and some Depreciation Schedule providers are still getting it wrong. There are thousands of incorrect Depreciation Schedules out there and they will be landing on accountant desks this tax season.

Another deduction easy to target is the treatment of Special Levies. Too many people just claim Special Levies in the way they claim other strata fees.

Broadly speaking, the purpose of the Special Levy and the length of time someone has owned a property dictate the treatment of a Special Levy. Your accountant will be able to advise the correct treatment.

In November 2017 new depreciation legislation passed that has affected the depreciation entitlements for some residential property investors. We’ve spoken with many confused investors and accountants needing to get up to speed on the changes in the following months.

We’ve run several webinars covering the changes to the depreciation rules in detail and have been getting some great feedback, so we’re making a recording of the webinar available here. The New Property Depreciation Landscape video is a little over 20 minutes and covers all the ins and outs of the new Depreciation rules. If you’re a serious investor, tax or real estate professional and want to understand the new Depreciation rules this video is for you.

If you have any questions relating to a specific property, we’re always happy to assess properties free of charge and provide a no-obligation quote, just call us on 1300 66 00 33.