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The answer in the majority of cases is yes. A Tax Depreciation Schedule can reduce an investor's taxable income, and hence by claiming these deductions, investors can significantly enhance the after tax return from their investment and generate a healthier cashflow.
As soon as you know the date that your property will be available for lease from, you can apply for your depreciation schedule. It is best to do the report as soon as possible once you have these details to ensure you are not missing out!
For a Tax Depreciation Schedule to be ATO compliant, you will need a quantity surveyor to create your report. Before engaging a company to do your depreciation schedule, you should check that they are members of the Australian Institute of Quantity Surveyors (AIQS) and registered with the Tax Practitioners Board.
A Quantity Surveyor is an independent professional consultant to the property and construction industries, offering advice to investors, builders, developers, financiers and private clients.
The cost associated with preparation of a Tax Depreciation Schedule varies slightly from firm to firm. Generally, the largest difference in price is between self-assessed or full-inspection reports – both are ATO compliant, but the full-inspection requires more resources from the company as they physically visit the site, hence the higher price. As all Tax Depreciation companies are required to follow the same ATO requirements, a more expensive report does not always mean you will end up with higher returns. Before engaging a company, you should obtain several fee proposals to ensure you are getting the best value for your money. At ATDS we are confident that our reports provide good quality for money – if you find the same service for a lower price, we are more than happy to price match.
Whilst cost is often the determining factor in deciding which company to engage, there are several other considerations: is the company ATO compliant? Will they answer any questions that you, your accountant or the ATO may have? Does the company make use of Low Value Pooling and other legislation to maximise your claims in the early years? In our case, the answer to all these questions is yes!