Tax Depreciation
What is the difference between Division 43 - Capital works and Division 40 - Capital allowances?
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Division 43 Capital works encompass (but not limited to) permanent structures such as walls, roofs, driveways, fences, and carports. Division 40 Capital allowances predominantly involve (but not limited to) removable assets such as cooktops, ovens, air conditioning units, blinds, and carpets, which generally have a shorter effective lifespan than 40 years. It is imperative to distinguish these categories, as Australian tax regulations treat them differently in the context of overall property depreciation.

I am a first home owner; can I claim tax depreciation on my property?
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Although depreciation claims are not applicable while residing in the property, they can be claimed during income-producing periods. This includes separate rentals like granny flats, rooms, or distinct sections of the property. Please contact us directly to explore how we can help calculate depreciation based on actual rental periods, thereby maximising your tax relief.

Is it possible to claim depreciation on the refurbishment works of my investment property?
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Yes, it is possible. While it is important to keep records of the refurbishment costs, we are able to assess and quantify the eligible depreciation on the refurbishment irrespective of the availability of receipts.  

Do I need a site inspection for my tax depreciation schedule?
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Where possible, we strongly advise a site inspection be conducted by a qualified inspector. These inspectors are equipped to identify eligible assets, detect renovation work, and estimate constructions costs. 
However, there are instances where a site inspection is not feasible for various reasons. In such circumstances, at Quantum QS we are committed to passing on the cost savings from our fees, directly to our clients. 

Can I claim renovations from the previous owner?
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Renovations falling within the scope of capital works (Division 43) are eligible for claims provided they were undertaken by previous owners and completed after the 27th of February 1992.
Claims for plant and equipment (Division 40) are only permissible if the property was acquired before 7:30pm AEST on the 9th of May 2017. If your property was purchased after this date, these items are classified as second-hand and consequently, are no longer eligible for depreciation claims.

 I've been informed that my property is considered too old for depreciation claims. What are my options?
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Even if your property predates September 15, 1987, and is consequently ineligible for Division 43 (Capital Works Deductions), it may still qualify for Division 40 (Plant and Equipment) depreciation.
Moreover, properties that have undergone recent refurbishments are eligible for both building allowances and plant and equipment depreciation. It is therefore advisable to consult with our certified Quantity Surveyors before concluding that your property is too old to derive depreciation deductions.

If I have purchased my property after the 9th of May 2017, how does the recent government legislation apply to me?
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The government introduced amendments that impact Division 40 (Plant and Equipment) assets in properties acquired after 9th May 2017, 7:30pm AEST, particularly those classified as second-hand. It's important to note that these legislative changes do not affect newly purchased assets for second-hand properties. These assets can be deducted in the conventional manner. 
Depreciation claims for commercial properties, properties used for business purposes and ability to claim Division 43 building write-off deductions for a residential property acquired post 7:30pm AEST on the 9th of May 2017 remain unaffected by the government amendments.

Is there any value in getting a tax depreciation report if I purchased a property after the 9th of May 2017?
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If the property purchased is either brand new or held within a company, trust, or super fund (excluding SMSF), the recent legislative changes will not impact depreciation claims. However, if the property is second-hand and not held within a company, trust, or super fund (excluding SMSF), depreciation will be limited to Division 43 for capital works and new assets. Second-hand assets under Division 40 will be considered as capital loss, rather than depreciable assets.

As an Australian tax resident, can I claim property tax depreciation from my overseas properties?
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If you are a tax resident in Australia, you have the potential to leverage tax depreciations benefits for your international investment properties. We possess a wealth of experience in preparing Tax Depreciation Schedules for properties in across numerous global cities including (but not limited to) Auckland, Singapore, New York, London and Dubai.

As a foreign tax resident investing in Australia, can I claim property tax depreciation?
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For international investors considering the purchase of a rental property in Australia, it is a legal requirement to file an Australian tax return. Therefore, having a tax depreciation schedule can be beneficial for this process. Please contact us to get a comprehensive understanding of your tax responsibilities.

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