Accountants, real estate agents and mortgage brokers provide essential professional services to property investors. An accountant will file your tax returns, whereas a real estate agent will find the next hot property for you. On the other hand, a mortgage broker will be busy looking for the best financing options out there. However, while your accountant might be excellent with numbers, they might not help you to maximise tax deductions of property depreciation. Most investors, even the most experienced ones, often overlook the importance of optimising property depreciation. Reports show that many of the 2.1 million rental property owners in Australia don't take advantage of property depreciation; therefore, the investors fail to maximise tax deduction on depreciating property. Consequently, property investors are missing out on money that could significantly improve their cash flow. This article provides expert tips on how property investors can take full advantage of property depreciation laws.

Reclaim Missed Depreciation Deductions 

Most property investors pay little attention to the process of preparing the property depreciation report, which often leads to missed deductions on depreciating properties. However, even after realising the missed opportunities, investors might not be aware that they can reclaim previously missed depreciation deductions. It is critical to know that the Australian Tax Office (ATO) allows property investors to recover lost dollars by amending two previous tax periods. Therefore, if you believe that you have not been maximising your depreciation returns, you can still reclaim deductions from the two prior tax periods.  

Reclaim Deduction on Older Property 

A common misconception among property investors who buy older buildings is that they cannot claim a depreciation deduction on the old houses. However, nothing could be further from the truth. While it is true that you will get more depreciation deductions from new buildings, old properties also have valuable deductions that you can salvage. The reason is that previous owners might not have claimed deductions on the last renovations made to the property. If that is the case, then you can prepare a property depreciation report on any current updates which you can claim a deduction. The rule of thumb is that any old property that you buy has some level of deductions that you can claim, thereby maximising your returns.

Hire a Quantity Surveyor 

It might seem reasonable to use your accountant or other DIY (Do It Yourself) options to prepare your depreciation schedule. While the methods are low cost, you are opening yourself up to losing thousands of dollars through missed property depreciation deductions. Therefore, hiring a qualified quantity surveyor is non-negotiable. Although most surveyors charge high fees, the amount of money you save by maximising on deductions will be enough to take care of the costs. Furthermore, the fee spent on preparing a property depreciation schedule is tax-deductible, which means that you save even more.