This edition of our Weekly Property News centres on investors and is brought to you by Jason Mudford, General Manager of OBrien Real Estate.
The good news this week is the demand for rental property still remains strong and in fact, you’ll see in this graph volumes are up 14% YEAR ON YEAR, although being down a little from the highs in late May. You’ll also see the drop in volumes in the first lockdown and then how quickly the volumes came back.
With the first month of the new financial year already behind us, it’s still not too late to check with a professional quantity surveyor to what you can claim on wear and tear to the building and its fixtures and fittings.
Here are my top 2 mistakes I see property investors making.
Mistake Number 1 – Getting the depreciation category wrong.
There are two types of depreciation categories, capital works and plant and equipment. One example of a mistake investors make is with the floating timber floors. Many assume they are permanently fixed to the building and therefore a capital works deduction when it’s actually removable, making it a plant and equipment deduction. The difference can be between $250 and $1300 in your first-year deductions.
Mistake Number 2 – Is assuming depreciation on older properties can’t be claimed.
Legislation introduced in late 2017 means that depreciation of second-hand plant and equipment assets can no longer be claimed. Yet capital works deductions remain unaffected and make up the bulk of a depreciation claim on investment property, regardless of whether it is new or second hand.
That’s all for this week, I’m Jason Mudford and remember always use a professional quantity surveyor. The information provided today is of a general nature you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.