What is a Tax Depreciation Schedule?
A Tax Depreciation Schedule (TDS) is a document that calculates the amount of depreciation that can be claimed for income tax purposes for a specific property. Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. For income tax purposes, the Australian Taxation Office (ATO) allows investors to claim depreciation as a tax deduction.
A TDS is important for property investors because it maximizes the tax benefits that can be claimed for property investment. It is also an important tool for property buyers, who can use it to assess the potential tax benefits of a property before purchasing it.
If your property was built after the 18th of July 1985 this will also include the building itself. If your property meets this qualification and the original construction data is not available, it is essential that you hire a Quantity Surveyor to estimate this cost.
It’s important to note that the rules and regulations regarding depreciation and TDSs can vary depending on the jurisdiction, the property type, and its usage. Property investors should seek advice from a tax professional to ensure they are aware of their tax obligations and to ensure that their TDS complies with the relevant regulations.
How much does a tax depreciation schedule cost?
The cost of a Tax Depreciation Schedule (TDS) for an investment property can vary depending on several factors such as the location of the property, the size of the property, the number of assets in the property, and the complexity of the schedule. The cost will also depend on the professional who will be preparing the TDS.
On average, a TDS for an investment property can cost anywhere between $300 to $1000 or more. Asset Economist Tax Depreciation Schedules are completed in 3 easy steps from $500 + GST.
It’s important to note that while the cost of a TDS may be in excess of your budget, the potential tax savings from claiming depreciation on an investment property can be substantial, and can help the investor to offset the cost of the TDS over time. It is also important to ensure that the TDS is prepared by a qualified professional to ensure that the schedule is accurate and complies with all the relevant regulations, as this can help the investor to maximize their tax benefits. Asset Economist has focused on providing Tax Depreciation Schedules for many years and we can help you save time and spending.
It’s important for the property investor to keep in mind that the cost of the TDS is a one-time cost and the benefits of the TDS can be reaped for a number of years.
Is it worth getting a tax depreciation schedule?
Whether or not it is worth getting a Tax Depreciation Schedule (TDS) for an income-producing property, such as a rental property, depends on the individual investor’s situation. A TDS can be a valuable tool for property investors because it can help to maximize the tax benefits that can be claimed for property investment.
Here are a few reasons why it can be worth getting a TDS:
Tax savings: A TDS can help property investors to claim depreciation as a tax deduction, which can result in significant tax savings over time.
Asset Management: A TDS can help property investors to manage their assets by providing a detailed breakdown of the depreciation that can be claimed for the property, which can help the investor to plan for future repairs and maintenance.
Increase in property value: A TDS can help property investors to increase the value of their property by providing a detailed breakdown of the depreciation that can be claimed for the property, which can help the investor to plan for future repairs and maintenance.
Compliance: A TDS is a requirement for compliance with tax laws.
Professional service: An official TDS, which is prepared by a qualified Quantity Surveyor, is a must to claim the depreciation.
It’s significant for property investors to weigh the potential tax savings from claiming depreciation against the cost of getting a TDS. Additionally, it’s also important to seek advice from a tax professional and a Quantity Surveyor to ensure they are aware of their tax obligations and to ensure that the TDS is accurate and complies with all the relevant regulations.
Why Do I Need Asset Economics?
Every property is different, and so having an accurate schedule will determine the outcome of your tax return. There are two different categories the items must fall under, the first is equipment related like an oven or even your carpet, and the second is the building itself. Determining what qualifies for depreciation can get a bit tricky. Asset Economist as a Tax Depreciation Schedule professional can help you get the best possible tax return.
What is included in the fee:
- Cover page
- Glossary of terms
- Property summary
- Division 43 summary (building write off @ 2.5%)
- Diminishing value summary (plant and equipment)
- Prime cost summary (plant and equipment)
- Total summary – 40 years