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What Investors Need to Know About Depreciation Claims

depreciation deductionsIn an article for the website Streetnews, Bradley Beer talks about the importance that depreciation claims wield and how the investors may be affected by inefficient claims. While planning investments, investors wish to make an informed decision and depreciation claims become an integral part of such decisions. A fundamental knowledge, to say but the least, is desirable and this includes dimensions like depreciation legislations as well as how and when claims can be made.

Capital Works and Plant and Equipment deductions

You can claim “capital works” deductions for fixed and structural items like walls and ceilings and “plant and equipment” deductions for removable objects like carpets and air conditioners. A Quantity Surveyor prepares a tax depreciation schedule and this can be used as the chief document (the arrangement cost of the schedule is 100 per cent tax deductible).

Depreciation legislation

For getting the most out of the claims, not only do investors need to be aware of the legislation surrounding the subject but also construction costing. Beer advises that those looking to hold their property for a short duration of time must seek the diminishing value method for it gives the maximum benefit in the early years of a property’s life.

You can read the original article here.

Investors lacked awareness in the past

Property investment is definitely a master tool for creating wealth and it then is a sorry statement that investors have repeatedly missed out on claiming important deductions like “capital works” and “plant and equipment” in the past. One can understand ATO’s date-related guidelines coming in the way of claiming “capital works” deduction but their lack of knowledge witnessed over the “plant and equipment” scene is baffling.

Investors will only strengthen their hands if along with an understanding of other facets of the game, they are also keen to grasp all there is to know about depreciation claims. I am not a financial adviser and pretty happy to be a buyer’s agent, truth be told. But I know I’ll be happier if this article spurs investors to seek as much information and knowledge as they can about the subject.