Older Properties and Depreciation

By Bradley Beer, BMT Tax Depreciation

Many investors remain unsure about whether it is worthwhile obtaining a depreciation report for a residential property that was built before 1985.

Current tax legislation states that any property built before 18 July 1985 (residential) and 20 July 1982 (non-residential) can not claim the capital works allowance as a deduction. This often results in the investor not thinking to obtain a depreciation report as they believe that their property is too old. However it is worth enquiring about any property - even one that is 100 years old!

In the case of older properties, it is worth noting that a capital allowance and tax depreciation report covers not only the capital works allowance but depreciation of plant and equipment as well. This means that all properties that obtain an income by the way of rent should be eligible to claim a deduction for the plant and equipment items contained within the property.

Even if a property is too old to claim the capital works allowance for the building structure, the investor will still be eligible to claim the plant and equipment allowance.

Additionally, if extensions or renovations were completed after 1982 (non-residential) or 1985 (residential), they will attract the capital works allowance.

What types of plant and equipment items can be claimed?

Many plant and equipment items contained within a property are able to be depreciated over their effective lives. Some of these items include: <table style="width: 817px; height: 244px;" border="0" cellpadding="5" align="center">

hot water service washing machines air conditioner ceiling fans cooktops light dishwasher ovens shades carpet floating timber floors microwaves blinds rangehood vinyl exhaust fans smoke alarms furniture package clothes dryer freestanding spa curtains security systems

</table> Article Provided by BMT Tax Depreciation Pty Ltd. Bradley Beer (B. Con. Mgt) is a Director of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia wide service.