Depreciations of Your Investment Property

Many investors are aware of their investment property depreciation entitlements and this will benefit them accordingly. Yet many are still unaware that they are able to claim investment property depreciation as a tax deduction and subsequently miss out on the available tax credits. Many investors fall into the trap of thinking that Gold Coast investment property depreciation is only relevant for brand new properties. Whilst the benefits are greater for newer properties, it’s generally still worth while claiming your depreciation on older properties. Organizing a depreciation report for your investment property could be the difference between turning a negatively geared investment into a neutral or positively geared asset and possibly providing you with a positive cash flow against a property with negative cash flow. Over time, your investment property will age. The Australian Taxation Office allows quantity surveyors to calculate a deduction from this wear and tear so that the owner can claim it and it doesn’t just apply to the building itself, fixtures and fittings can also be claimed. When properly assessed, these items can quickly add up to significant tax deductions. In terms of total returns from investment property, maximizing the tax deductions are paramount. Your accountant will ask you for a tax depreciation schedule to be prepared on each of your investment property and it is important that you had a full inspection carried out on each of these investment properties and be completed by a firm that’s approved with the tax practitioner’s board. This ensures that your tax depreciation schedule not only picks up all the depreciable items but is also ATO-complied. Luckily, most people in turn understand that it is very hard to estimate anything without seeing the property. A rule of thumb, newer properties tend to have more depreciation. The amount of depreciation can be anywhere from $1,000-$15,000 in the first year, depending on the property. By calculating depreciation on your investment property, you may be able to claim an income tax deduction and lower your overall tax payment in a financial year. When buying an investment property, you need to consider that your costs will go far beyond the initial purchase price. You will also incur costs preparing the property for rental, and maintaining it in good-working order for your tenants.

There may be initial costs fitting the property out, renovating or repairing it which is the overtime wear and tear may mean the replacement of:

• Floorings,
• Furniture,
• And appliances.

Moreover, structural improvements may need to be made. This creates an expense to you so will lower your net income. However, by calculating depreciation which is the decline in value of an asset over time, you may be able to claim your costs as an income tax deduction. Therefore, it’s important to keep detailed records of all the expenses you incur in holding a property so you can offset your tax liability. New properties have a higher Gold Coast investment property depreciation rate than older properties. It’s one of the principal reasons why many good investors prefer brand new properties in their portfolios. Building write-off is governed by the date that construction began. If a residential building was built before 18 July 1985, there is no building write-off available. However, investors who own properties built before this date are still able to make a claim on the plant and equipment (fixtures and fittings) within the property, including any recent renovations, even if that renovation was carried out by a previous owner.

The Key Role of a Quantity Surveyor In The Construction World

A quantity surveyor can help promote sustainability in a construction project. There are a set of ideals which help improve sustainability but it does require effort and thought, and for everyone to stick to them. They include reusing existing buildings wherever possible to reduce costs and build time, designing for minimum waste, avoiding over-specification and using pre-assembly where possible. Minimizing energy use in construction and in particular avoiding using energy intensive materials like cement and aluminum is also a key part of their role.  The first stages of a quantity surveyor’s involvement will be during the early stages of budgeting, remaining close to the budget throughout the entirety of the project. They will work with the wider team and ensure that detailed cost plans are created in order to confirm that all costs have been identified and collated, ensuring maximum efficiency. From early initial calculations, quantity surveyors will utilize their cost disciplines to allow them to effectively estimate costs and ensure that the monitoring of costs is maintained effectively throughout. They may be required to advise on a procurement strategy and will typically provide their professional assistance during the preparation of any commercial estimates, submissions of tenders and any further commercial construction company cost related activities. From schedules of resource quantities and materials to bill preparation, labor costs and service billing, a quantity surveyor is involved in a vast range of the activities required to construct and equip the building before ground is even broken. One of the key issues encountered by construction companies working on these mega size infrastructure developments is ensuring successful project delivery: both on time and within budget. With this, it is important to understand what roles of a Gold Coast quantity surveyor can play in ensuring the project is commercially successful.

The Quantity Surveying firm or Gold Coast quantity surveyor will prepare a depreciation schedule that contains the necessary evidence to support the report. The evidence collected could be in the form of:

• Photographs of the site
• Documentation showing the value and condition of each equipment, fitting or fixture in the property
• Construction cost
• Projection of any deductions claimed by the owner.

It is important to understand that depreciation can be for both old and new properties. No property is too new or too old when it comes to claiming depreciation. The quantity surveyor is the only one who is responsible for all the parts of the financial sections. As a construction company their emphasis is earn more profits and complete project within given period. Moreover, the main care of quantity surveyor is obtaining amount of capital, make securing flow of work and preventing losses. Also their one of main duty is limiting the level of using money and supervising the way that it is being spent. A quantity surveyor has to show a detailed proficiency in terms of financing and economics and the financial efforts on especial type of construction projects. One of reason is to occur financial crisis in construction industry is poor management in financial sector. Major collision of the financial crisis is falling salaries and job cut on the construction industry. Therefore, it is very important to control and administrate these key factors in order to recover the current crisis especially in the government sector of construction industry. Quantity surveyors have to play an important role with their knowledge and skills in construction industry. With this, construction industry should have adequate knowledge and skillful Gold Coast quantity surveyor.