Ducted air con and solar power best for depreciation

Ducted air con and solar power best for depreciation

Analysis by BMT Tax Depreciation has shown that ducted air conditioners, floating timber floors and solar power systems are the assets that generally have the highest depreciable value for property investors.

“Based on our experience preparing thousands of property depreciation schedules, we’ve found that these assets will average a combined depreciable value of approximately $27,000 in a residential property,” BMT CEO Bradley Beer says.

“In the first financial year alone, these three items could result in about $3,400 in deductions for the owner.”

While these assets generally result in the highest depreciation deductions for property owners, there are other items that BMT finds more frequently.

“The three depreciable assets we find most often during a site inspection are hot water systems, split-system air conditioners and bathroom accessories,” Beer says.

“We find that these assets have a combined average depreciable value of around $5,000.

“For an investor, these three items could result in a first financial year deduction of $1,100 and a cumulative deduction of around $3,500 over five years.”

There are also a number of assets investors easily miss and fail to maximise depreciation deductions for, including smoke alarms, garbage bins and exhaust fans.

“The depreciable value of these items will usually total $1,200 and as these smaller ticket items are often valued less than $300 each, they could also entitle their owner to claim the full amount as an immediate write-off in the first financial year,” Beer explains.

“The deductions for assets found in an investment property add up and it pays for an investor to understand how depreciation works and which items can be depreciated.

“When preparing a depreciation schedule for a property investor, specialist quantity surveyors will complete a detailed site inspection to ensure no assets are missed,” Beer adds.