How Property Investors SAVE TAX - Most People STILL DON'T Know Depreciation Tax Rules In Australia!

TL;DR

Learn how to save on taxes and build passive income in property investing through depreciation strategies.

Transcript

okay hi everyone my name is peek and i'm super super excited actually to to have um someone on on the episode today i don't know if you're watching on youtube whether you're in my 8 000 member facebook group or you're listening to this in my podcast which is brand new by the way but i've got chuan here from duotech so like so many of you you guys a... Read More

Key Insights

• 👋 Importance of having a knowledgeable team: Building a team of professionals who understand your goals and can provide personalized attention is crucial for successful property investing.
• 😎 Experienced quantity surveyor essential: A quantity surveyor with expertise in tax depreciation can help investors maximize their tax deductions and improve cash flow through accurate depreciation schedules.
• 💼 Depreciation benefits for different types of investors: Advanced property investors with higher incomes can use depreciation as an additional negative gearing tool, while those with more modest incomes use it to increase cash flow and strengthen their portfolios.
• 💰 Depreciation and cash flow: Depreciation can turn a positively geared property into a negatively geared one, allowing investors to claim additional tax deductions and increase their passive income.
• 💸 Return on investment for depreciation schedules: Getting a depreciation schedule done is worth the cost as it can significantly increase tax deductions and improve cash flow for property investors.
• 🏠 Depreciation benefits for different types of properties: Different types of properties (e.g., new, slightly negative cash flow, commercial) offer varying depreciation benefits, and it is important to understand how each can contribute to optimizing tax savings and passive income.
• 🔬 Accuracy and science behind depreciation schedules: Quantity surveyors rely on accurate building assessments and industry standards to calculate construction costs and determine depreciation for both new and existing properties.
• ⚖️ Building a successful property investment team: It is essential to build a team of professionals, including a knowledgeable quantity surveyor, who can help navigate the complexities of property investing and ensure that all available tax benefits are maximized.

Questions & Answers

Q: What is the role of quantity surveyors in maximizing tax benefits for property investors?

Quantity surveyors help property investors identify and claim depreciation on buildings and plant assets, reducing taxable income and increasing cash flow.

Q: How do different types of property investors utilize depreciation strategies?

Advanced investors with high incomes rely on depreciation as an additional negative gearing tool, while investors with lower taxable incomes use depreciation to increase their cash flow from positive cash flow properties.

Q: Can you claim depreciation on properties built before 1987?

For residential properties, depreciation is primarily claimed on the building, with the cut-off date for construction being September 19, 1987. Second-hand plant and equipment assets are no longer claimable as of May 9, 2017.

Q: Is it necessary for a quantity surveyor to physically inspect a property to prepare a depreciation schedule?

With advances in technology and access to property data, physical inspections are less necessary. Quantity surveyors can rely on floor plans, photos, and other resources to determine building construction costs accurately.

Q: How do trusts affect depreciation claims?

Depreciation claims can still be made on properties owned by trusts, and the benefits can be passed on to beneficiaries. However, specific advice from an accountant or financial advisor is recommended.

Q: Is it worth getting a depreciation schedule for older properties?

Yes, older properties can still have significant depreciation benefits, especially for capital improvements made after February 27, 1992. A quantity surveyor can assess the property and determine the eligible deductions.

Q: What is the importance of having a knowledgeable team in property investing?

Building a knowledgeable team, including a quantity surveyor, can help investors navigate the complexities of tax deductions, maximize savings, and make informed financial decisions. Always leverage the knowledge and experience of professionals in the field.

Summary & Key Takeaways

• Quantity surveyors help property investors maximize tax benefits and optimize passive income.

• Depreciation allows investors to show a negatively geared property as positively geared in the eyes of the ATO.

• Savvy investors use depreciation to reduce out-of-pocket expenses on high-cost properties and increase cash flow on positive cash flow properties.

• The 2017 legislation restricts depreciation claims on second-hand plant and equipment but allows full depreciation on buildings built after September 1987.