Managing a Self-Managed Super Fund (SMSF) gives trustees greater control over retirement savings, but it also brings a heightened level of responsibility—particularly when it comes to compliance. One of the most critical compliance obligations is the accurate and timely valuation of property assets.

Whether your SMSF holds residential or commercial property, understanding valuation requirements and ensuring adherence to Australian Taxation Office (ATO) standards is essential to protect your investment and avoid regulatory breaches.

Why Property Valuation Matters for SMSF Compliance

Accurate property valuations are fundamental to complying with ATO guidelines and the Superannuation Industry (Supervision) Act 1993 (SIS Act). Each year, SMSF assets must be reported at their current market value using objective and supportable data. This ensures accurate reporting of member balances, contribution limits, and financial statements.

Failing to provide correct valuations can lead to serious consequences, such as compliance breaches, ATO scrutiny, or audit issues.

Undervaluing assets can distort fund performance, while overvaluing may inflate member entitlements and trigger tax penalties. A reliable market valuation also assists in tracking capital gains, rental returns, and the overall performance of your property portfolio.

When conducting valuations, it’s essential to consider key factors such as location, condition, size, age, renovations, and recent comparable sales. The valuation must be backed by documented evidence, whether it’s from a qualified valuer or a reputable source like a real estate agent or online service.

ATO Rules and Guidelines for SMSF Property Valuation

The ATO mandates that SMSF property valuations meet the following criteria:

• Use reliable evidence: Valuations should be based on recent comparable sales, a comparative market analysis (CMA), or a formal valuation by a registered valuer.
• Ensure independence: Valuers must be independent, not related to the fund or its members.
• Reflect year-end market value: The valuation must reflect the property’s market value as of 30 June each year.
• Revalue when appropriate: New valuations are required after significant events such as renovations, substantial market changes, or prior to selling the property.
• Seek expert guidance: While a formal valuation isn’t always mandatory, it is strongly recommended for complex or high-value properties.

Adhering to these rules ensures your SMSF remains compliant and audit-ready.

Who Can Conduct an Independent SMSF Property Valuation?

The ATO permits several independent professionals to carry out valuations, provided they are suitably qualified and impartial.

Approved valuers include:

• Registered property valuers – Preferred for high-value or complex properties, as they provide detailed, ATO-compliant reports.
• Real estate agents or appraisers – Acceptable for more straightforward properties if supported by written evidence and recent comparable sales data.

The key is independence: the valuer must not have any financial interest in the SMSF or any relationship with its members. Documentation must also be retained for at least 10 years to meet audit and record-keeping requirements.

Common Valuation Mistakes to Avoid

Even experienced trustees can make errors that jeopardize compliance. Common mistakes include:

• Using outdated or old valuations.
• Relying on related parties for property assessments.
• Failing to provide supporting evidence such as comparable sales data.
• Overlooking major changes like renovations or lease changes.
• Misreporting asset values, leading to distorted member balances.
• Avoiding these errors helps maintain audit readiness and ensures accurate fund reporting.

How to Prepare for an Audit-Ready SMSF Valuation

Preparation is key to a compliant SMSF valuation. Follow these best practices:

• Keep records up to date: Maintain all contracts, lease agreements, and past valuations.
• Collect market evidence: Secure recent sales data and independent appraisals.
• Schedule valuations in advance: Arrange updated valuations before 30 June each year.
• Engage qualified professionals: Choose valuers familiar with SMSF requirements.
• Ensure consistency: Align asset registers and financial statements with valuation figures.

An audit-ready valuation, backed by strong documentation, simplifies compliance and confirms the fund’s reporting integrity.

Trustee Responsibilities and Documentation

As an SMSF trustee, it is your legal responsibility to ensure that all property valuations are compliant with ATO guidelines. This includes:

• Retaining documentation: Keep valuation reports, supporting evidence, and related documents for at least 10 years.
• Reviewing valuations annually: Ensure market values are updated to reflect current conditions.
• Verifying independence: Confirm that valuers have no ties to the SMSF or its members.
• Collaborating with professionals: Work with qualified valuers and SMSF auditors who understand regulatory standards.

Good governance, meticulous record-keeping, and independent valuations are vital for avoiding audit issues and building confidence in your SMSF’s financial position.

Conclusion

Ensuring your SMSF property valuations are ATO-compliant is more than just a regulatory requirement—it’s a fundamental aspect of responsible fund management. By following ATO guidelines, engaging independent and qualified valuers, maintaining clear documentation, and staying vigilant with annual reviews, trustees can avoid compliance risks, protect member interests, and support the long-term success of their SMSF.

Accurate valuations not only help meet legal obligations but also contribute to informed decision-making and sustainable retirement outcomes

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How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Did you know that 70% of investors in Australia don’t buy a tax depreciation schedule for their investment properties?

Depreciation schedules are one of the most effective but underused tools available to a property investor to maximise their returns.  When you think about the fact that depreciation is the second-highest tax deduction on your property after interest on your loan, it’s unbelievable how much investors are leaving on the table.

But what is a depreciation schedule exactly?  And how can you benefit from it?

We’ll break down everything you need to know about tax depreciation schedules so that you can maximise the tax benefits available to you through your investment property.

What Is Tax Depreciation?

Before delving into what is a tax depreciation schedule is, it’s important to understand property tax depreciation. Depreciation is a non-cash deduction that allows you to claim a portion of the cost of your property over its useful life. To claim depreciation, you need to order a depreciation schedule from a quantity surveyor.

As a building gets older, its structure and the assets within the building are subject to general wear and tear. In other words, each year, the value decreases and thus, depreciates.

The Australian Tax Office (ATO) allows property investors, who generate income from their investment property, to claim the property depreciation as a tax deduction.

Put simply; depreciation is the decrease in an asset’s value over time due to natural wear and tear. Property depreciation can provide a significant tax benefit for investors, as the Australian Taxation Office (ATO) effectively allows you to offset the cost of this wear and tear against rental income.

What sets a depreciation claim apart from other rental expense tax deductions for your investment property is that it is a non-cash deduction – you don’t have to spend any money to claim it.

The structural component of a building usually depreciates at a fixed rate over a long period of time—usually 40 years. In contrast, plant and equipment assets depreciate according to their effective lives as they generally wear down faster than the building itself.

There are two main types of property depreciation: capital works deductions (Division 43) and plant and equipment (Division 40) deductions. Investors can claim a capital works deduction for the building itself, as well as plant and equipment depreciation deductions for assets within the building, such as furniture, fittings, and appliances.

Division 43 – Capital Works Deductions

Division 43 Deductions refer to the depreciation of the structure of the building. The structure of a residential building, if constructed after September 1987, generally has an effective life of 40 years. You can claim a capital works deduction on construction costs, too.

Division 40 – Plant and Equipment

The term “plant and equipment” refers to the fixtures and fittings that are found within the building. Plant and equipment depreciation on these easily removable assets includes items such as carpets and air conditioning units.

What Are Tax Depreciation Schedules, and How Can They Change Your Tax Return?

Simply put, depreciation schedules are reports detailing the tax depreciation deductions you can claim on your investment property.  Claiming these tax-deductible expenses involves identifying the value of an investment property, what you estimate construction costs to be, and all its fittings and fixtures.

The purpose of a tax depreciation schedule is to outline the value of both your Division 40 and Division 43 assets as well as how much it has depreciated and will depreciate. This will give you a clear idea of how much you can claim for tax depreciation.

A tax depreciation schedule provides a breakdown of the depreciation deductions you can claim for an investment property and eligible plant and equipment assets. It includes the original value, the estimated effective life, and the depreciation rate for both the structural components and the plant and equipment assets.

Example

In February 2020, Noel purchased his first investment property for $375,000 and immediately rented it out.  Based on the tax depreciation schedule he obtained from the quantity surveyors at Duo Tax, the construction of his property commenced in March 2003 and was completed in November 2003. The cost of construction was estimated to be $225,000.

The property depreciation schedule outlines that Noel can claim a capital works deduction at a depreciation rate of 2.5% per annum, as the construction of his investment property commenced after 15 September 1987.

In his first year of owning the property, Noel was only able to rent out the property from 1 February 2020 to 30 April 2020, so he can claim a deduction for 90 days:

($225,000 x 2.5%) x (90 days of 366 days in 2020) = $1383.20.

Thus, Noel can claim a capital works deduction of $1383.20 in his 2019-2020 tax return. 

As the property was built in 2003, Noel’s tax depreciation report will highlight the capital works deductions he can claim until 2043, provided that he still owns the investment property and it’s being used to produce income.

The tax depreciation schedule report also charts the loss in value of his plant and equipment assets, such as his air-conditioning unit, over its effective life. So, Noel can claim tax deductions for these assets too.

What Does a Tax Depreciation Schedule Include?

Based on Noel’s example above, a tax depreciation schedule generally includes the following components:

• an introduction to the schedule with a glossary of terms to help you better understand how the schedule works for depreciation purposes,
• a detailed 40-year estimate showing all Division 43 (capital works) depreciable items,
• Examples of both the prime cost and diminishing value methods of depreciation to help you decide which method is best for your individual circumstances,
• the effective life and prescribe depression rate for all Division 40 (plant and equipment) assets, and
• a breakdown of the assets that belong to low-value pools as well as those that qualified for an instant-asset write-off.

Do I Need a Depreciation Schedule Every Year?

A single tax depreciation schedule covers a specific investment property and is valid for up to 40 years, which means you can claim tax deductions each year with the same report. When you purchase another investment property, you will need a separate depreciation schedule for that investment property.

However, if you are looking to sell your investment property, then you will need to have a property valuation carried out by a quantity surveyor to calculate capital gains tax.

How can we help? if you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

BMT Tax Depreciation has been helping property investors claim thousands of dollars in depreciation deductions for decades. A look into the schedules they have completed in the last three years has revealed an interesting statistic: 66% of these investment properties have undergone a renovation or an addition.

What does this 66 per cent mean? 

This statistic means that two thirds of properties will contain valuable tax deductions that are only identifiable by a trained eye, and which could result in thousands of extra dollars back at tax time.

These deductions may arise from performing a full renovation or from simply installing a new hot water system and come in the form of tax depreciation.

So, what is property depreciation?

Depreciation is the natural wear and tear of property and assets over time. Investors can claim depreciation on the eligible assets and structure of their investment properties as a tax deduction each financial year.

It can only be claimed under two specific categories. The first is capital works which is the structure of the building and fixed assets like windows and doors. The second category is plant and equipment which includes the easily removable or mechanical assets like carpets, furniture and air-conditioning units.

A tax depreciation schedule is essential to claiming any depreciation that is available. This document outlines every depreciation deduction available from the property for up to forty years. Over the past twenty years, BMT Tax Depreciation has completed over 700,000 of these schedules across all types of residential and commercial properties.

What does this do to the depreciation claim? 

Essentially, an eligible improvement such as a property renovation allows the owner to claim extra depreciation deductions on the addition.

There are two key things to remember to make the most out of any addition.

The first is any recent renovation won’t be impacted by depreciation legislation changes introduced in 2017. This means the owner can claim any plant and equipment deductions on eligible assets within the renovation, even if the property was purchased second-hand after the legislative cut-off date of 9 May 2017. While any structural improvement, like a new door and frame, can be claimed for the next forty years with capital works deductions.

The second is to remember that anything added to an investment property should always be reflected in the property’s tax depreciation schedule. This ensures every single depreciation deduction is claimed for both the existing and added assets.

If the owner already has an active tax depreciation schedule, they can get it updated and amended. If they are yet to obtain a schedule for their property, they can contact a specialist quantity surveyor, such as BMT, top organise a free estimate of likely deductions available and quote.

BMT Tax Depreciation find any renovation or addition, no matter how big or small, through conducting a physical site inspection. Without a site inspection, it can be hard to find these, especially those additions hidden to the untrained eye.

This involves a specialist site inspector attending the property and inspecting every inch to ensure depreciation deductions are claimed to their full potential. The site inspection also ensures that any depreciation deduction is claimed with full compliance.

To learn more about depreciation and how to claim it on the renovations you have made to your investment property, contact BMT on 1300 728 726 or Request a Quote today.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Australia will create a licencing framework for cryptocurrency exchanges and consider launching a retail central bank digital currency as part of the biggest overhaul of its A$650 billion-a-day ($463 billion) payments industry in a quarter of a century

There has been a proliferation of product offerings from the Australian blockchain and cryptocurrency community, and the Australian approach to the sector has broadly remained supportive of new and innovative financial services and products using or transacting cryptocurrencies.  In part, the expansion of the sector in Australia has been led by businesses in the payments, crypto asset, lending, investment and custodial services spaces.

The use of cryptocurrency and non-cash payments has exploded in Australia during the pandemic as people’s lives shifted online. About 55 million non-cash payments are made in Australia every day, according to government data, with almost half the population using their phones to make payments. The number of Australians transacting in cryptocurrency has surged 63% so far this year, compared with last year.

Treasurer Josh Frydenberg confirmed the Commonwealth and Reserve Bank were now working on the feasibility of a central crypt. The government would begin consultation in early 2022 on establishing a licencing framework for digital exchanges, allowing the purchase and sale of crypto assets by consumers in a regulated environment.

The government would also consult on regulating businesses that hold crypto assets on behalf of consumers, and on the feasibility of a central bank digital currency,

The government wanted cryptocurrency exchanges and businesses to apply for financial licences, Mr Frydenberg said, to “give consumers a little bit more certainty and confidence about the parties that they’re dealing with.”

More than 800,000 Australians have owned cryptocurrency at least once, since the rise of digital currencies over the past decade.  Criminal enterprises have been drawn to Bitcoin, because of its anonymity.

Proposed new regulations

Firms that buy and sell cryptocurrencies will have to be licensed to bring safety and security to users, the treasurer said. The government will also work out a licensing plan for crypto exchanges next year, the Australian Financial Review reported.

While the Government has not significantly intervened in cryptocurrencies and related activities, there has been general clarification of the application of Australian regulatory regimes to the sector.  For example, since 2018, digital currencies have been caught by Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.

As well as in payments, there has been a growing expectation that crypto assets (including cryptocurrencies) will become accepted as an investment asset class. In June 2021, Australia’s primary corporate, markets, consumer credit and financial services regulator, the Australian Securities and Investments Commission (ASIC), launched a consultation process on its proposals to clarify expectations for crypto assets that form part of the underlying assets of exchange-traded products (ETPs) and other investment products.

Gerard Brody, chief executive of the Consumer Action Law Centre, said regulating crypto exchanges would recognise those entities “are now holding significant sums of peoples’ money and investments”. Regulating BNPL companies would “address the significant risk of debt and financial stress associated with these products,” Brody added in a statement

Source: Gilbert and Tobin Lawyers: https://www.gtlaw.com.au/ | Reuters –

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

The federal government has said it will extend access to its Home Guarantee Scheme designed to help first-time buyers and single-parent families own a home sooner by lowering the barrier to enter the property market and negating the requirement for mortgage insurance. The scheme is designed to help new buyers own a home sooner, with a deposit of as little as 5 per cent for first-time owners or 2 per cent for single-parent families.

Under the rules, the federal government guarantees the remaining 15 per cent needed to make up a typical home purchase deposit.  It is among several policies launched this year by the government to address housing unaffordability.

As many as 4,651 unused guarantee credits from the 2020-21 financial year would be reissued. Access to the scheme for the more than 4,600 prospective new home buyers caught by pandemic disruption will be granted by reissuing unused credits.The scheme was already extended a year in the Federal Budget in May, one of several housing policies handed down to improve access to the housing market. 60,000 new owners had been included in federal assistance programs so far.

The government also increased the amount Australians could withdraw from their superannuation under the First Home Super Saver (FHSS) from $30,000 to $50,000.

Under the rules of the underwriting scheme, the federal government guarantees the remaining 15% of the 20% needed to make up a typical home purchase deposit. Queensland tops the states for homes taken up so far under the scheme in 2020 and 2021, with 696 purchases. NSW had 442 in the period, ahead of Victoria with 332 and Western Australia at 220.

South Australia had 110 homes taken up, ahead of double-digit figures in the ACT, Tasmania and the Northern Territory. With the First Home Loan Deposit Scheme and the Family Home Guarantee combined, more than 39,000 homes are covered. At a speech delivered on Thursday, Morrison pointed to the number of Australians who had received federal assistance to get into a home.

The recent release of the annual Trends & Insiders Report for 2020-2021 on the Home Guarantee Scheme shows that one in five first home-loan deposit places went to essential workers, including 34.8 per cent who were nurses. 58% of the grants were distributed to people under the age of 30.

In October, a statutory review of the operation of the National Housing Finance and Investment Corporation Act found the home loan guarantee scheme had brought forward existing demand rather than boosting it, by enabling people who could not otherwise buy property to get a foot on the housing ladder. First home buyer schemes from all governments always target purchasing power as this works politically – yet it is all but unanimous among economists that doing so adds momentum to the price rises of homes these people are trying to buy.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Just because June 30 has been and gone, property investors don’t need to wait another financial year to get a tax depreciation schedule. Even if a schedule is ordered after the end of a financial year (FY), depreciation can still be back-claimed.

First, what is a tax depreciation schedule?

A tax deduction can be claimed for the natural wear and tear, or depreciation, of an investment property and its assets over time.

A tax depreciation schedule, as the name suggests, outlines all the depreciation deductions available throughout the lifetime of an investment property (up to forty years).

A tax depreciation schedule is prepared by a specialist quantity surveyor. Once prepared, the investor’s accountant will use the schedule each financial year to determine depreciation deductions.

What happens if a tax depreciation schedule is ordered after June 30?

Let’s say an investor has owned their rental property since February 2019 but didn’t order their schedule until August 2021. In this instance, they can still claim depreciation for FY 2019/20 and FY 2020/21. This is possible because a tax depreciation schedule allows an investor to adjust previous tax returns.

So, what’s the key message here? Even if you missed the June 30 deadline, it’s not too late to claim depreciation. The only difference ordering before June 30 is that the 100 per cent tax depreciation schedule fee can be claimed earlier rather than later.

What if an investor with a schedule made a property improvement last financial year?

In this scenario, the investor must ensure they have their current tax depreciation schedule updated. This is very simple to do and can have them reaping further benefits for years to come.

How can an investor tell the difference between an improvement and repair?

Improvements must be depreciated, while a repair can be claimed as an immediate deduction.

This space can be very grey as sometimes an improvement could be a result of having to make a repair. There’s one fundamental question an investor must ask themselves when determining what something is classed as – “have I improved this beyond its original state?’

For example, if an investor replaced their property’s old carpet with new hardwood timber floors it’s likely that this is an improvement and will need to be claimed using depreciation deductions. But if they replaced part of a rusted gutter or a cracked tile, this would generally be classed as a repair.

Investors can easily determine if something is an improvement or repair by having a quick discussion with a specialist quantity surveyor such as BMT or their accountant. These situations are often assessed on a case-by-case basis so it’s important to get the correct advice.

To learn more about depreciation and how it can help you maximise your return come this tax lodgement time, contact BMT on 1300 728 726 or Request a Quote.

BMT Tax Depreciation is Australia’s leading supplier of residential and commercial tax depreciation schedules.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.  Please contact 1300 728 726 or visit bmtqs.com.au for Australia-wide service.

You can find out more about depreciation here

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

The Perth Property Market Outlook – Update

It’s been a unique year for Perth’s property market as WA has navigated the impacts of COVID-19. While garnering national attention in early 2020 when four consecutive months of price growth indicated the progression of recovery for Perth property, the market emerged strongly following a brief pause in activity under lockdown restrictions, supported in turn by low stock levels and high resilience from sellers.

As we move further into the latter months of 2020, the market continues to strengthen, with a sustained rise in buyer activity (tracking on average 40-50% higher than the same period in 2019) and a continued lowering in combined stock on market supporting a rebound in market growth. CoreLogic’s Home Index report showed a 0.6% increase in dwelling values in October – the second consecutive month of headline price movements.

Gross Rental Yields | Australia 2020

Tightening stock levels have had an even greater impact on Perth’s rental market, with vacancy rates reaching a 13-year low of 0.95% this month as rental stock remains below 3000. Despite temporary COVID-19 legislation, these conditions are already placing upwards pressure on rental prices as tenants compete for properties, with median rents rising to $375 in October (REIWA).

While activity continues to track higher, the Real Estate Institute of Australia’s June Housing Affordability Report showed that Perth was once again the cheapest State across Australia to purchase property, with only 24% of family income required to meet loan repayments compared to the Australia-wide average of 34.5%.

These conditions are offering a unique set of conditions for both local and interstate investors, with the lower barrier to entry providing opportunities for  buyers to access properties with larger land content, and located closer to the CBD than they would achieve in other markets across Australia.

Change in Rents

Looking ahead, these conditions have seen a number of leading economists forecast strong growth projections for Perth. ANZ are predicting 12% price growth next year, with Westpac forecasting an 18% surge from mid-2021. Momentum Wealth’s buyer’s agents are already seeing improving conditions translate into strong growth across some market segments, particularly in established suburbs where tightening stock levels are being further compounded by limited oncoming supply.

Rental Stock Perth

For more insights into Perth’s market indicators, or to explore the current trends in more detail, download Momentum Wealth’s latest market report here.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals,its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Are you thinking about building a new investment property?

With the numbers proving that new properties hold the most depreciation deductions, building new is a popular choice.

Understanding construction costs can provide a ballpark figure of what to expect when building an investment property. Guides such as the BMT Tax Depreciation Construction Cost Table can help you decide on the best build for your investment property strategy and budget.

Construction costs consider the building type, design, level of finish and location. The Gross Floor Area and Fully Enclosed Covered Area rates allow construction costs to be estimated down to the square metre.

A specialist quantity surveyor is one of the few professionals recognised as having the skills and qualifications to estimate construction costs for depreciation purposes. This knowledge ensures that you can claim the most in depreciation deductions on the structural component of the building.

The structure of a building is depreciated using capital works deductions. On a new build, capital works can be claimed for forty years and on average make up 85 to 90 per cent of total depreciation claims. Therefore, it’s crucial to claim this lucrative deduction correctly from the very start to avoid missing out on thousands.

BMT Tax Depreciation has prepared over 700,000 tax depreciation schedules, Australia wide. BMT’s construction cost expertise ensures you claim the most out of your investment property.

To learn more about depreciation and construction costs, Request a Quote or call BMT on 1300 728 726.

BMT Tax Depreciation is Australia’s leading supplier of residential and commercial tax depreciation schedules.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.  Please contact 1300 728 726 or visit bmtqs.com.au for  Australia-wide service.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

This renovation tip can save you thousands

Renovating an investment property is different to renovating your own home. Whether the renovation is big or small, you will be taking a head over heart approach and doing what will help you improve your return on investment.

Claiming depreciation deductions on the assets installed during a renovation usually isn’t front of mind. However, choosing assets for your renovation that hold higher depreciation deductions can boost your cash flow sooner.

What is depreciation?

Depreciation is the natural wear and tear of a property and assets over time.

Only owners of income-producing property can claim depreciation as a tax deduction each financial year. BMT Tax Depreciation consistently sees these deductions save residential investors tens of thousands.

A tax depreciation schedule completed by a specialist quantity surveyor, such as BMT, is the only way an investor can claim depreciation. The schedule lasts up to forty years and is 100 per cent tax deductible.

Depreciation and new assets

If you’re thinking about giving your investment property a facelift before advertising to prospective tenants, you may have a few things in mind. Maybe you want to give the interior a fresh lick of paint, change the outdated flooring throughout or do a full bathroom renovation. Whatever you’re planning to do, depreciation on the assets you choose should be a key consideration.

For example, floor coverings such as carpet, floating timber and vinyl are called plant and equipment assets. Each asset has an effective life and is depreciated using the diminishing value or prime cost method.

Case study: claiming more sooner following renovation

Casey owns an investment property, and she has decided to renovate it now and sell it in two years’ time.

She wants to ensure that she claims the most depreciation possible in the two years following the renovation. Her two flooring options are vinyl flooring or floating timber floorboards.

Before deciding what flooring to use she consulted a specialist quantity surveyor, to find out what’s the best option from a depreciation perspective. The specialist advised that given her short-term investment strategy, vinyl may be the better option.

This is because vinyl has a diminishing value rate of 20 per cent, while floating timber floorboard diminishing value rate of 13.33 per cent. This means Casey can claim more sooner from vinyl flooring. Furthermore, vinyl generally requires less maintenance than timber floorboards do which is ideal for an investment property.

Contact the specialist or Tax Accountant prior to your renovation

Whether you’re turning your previous home into an investment or giving your current rental a facelift, consulting a tax depreciation specialist and your accountant will help you claim the most. BMT Tax Depreciation has helped thousands of investors claim lucrative depreciation deductions following an investment property renovation.

To learn more about depreciation, visit BMT’s website or Request a Quote.

 

BMT Tax Depreciation is Australia’s leading supplier of residential and commercial tax depreciation schedules.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.  Please contact 1300 728 726 or visit bmtqs.com.au for  Australia-wide service

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals,its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Did you know that property depreciation is the second biggest tax deduction for investors, after interest?

Despite this fact, 80 per cent of property investors are failing to take advantage of property depreciation and are therefore missing out on thousands of dollars in their pockets.

Property investors often assume they’re ineligible or that it’s not worthwhile to claim depreciation because they believe their property is too old or they haven’t owned the property for long enough. The reality is that it’s worthwhile making a claim on any property.

Requesting a tax depreciation schedule outlining what claims are available for a property owner can be the difference between turning a negative cash flow investment into a positively geared asset.

During the 2017/2018 financial year, BMT found residential property investors an average first-year deduction of almost $9,000. The amount is significant, so for an investor wondering what property depreciation is and how to make a claim, we’ll explain.

Depreciation is a non-cash deduction The Australian Taxation Office (ATO) allows the owner of an investment property to claim due to the wear and tear of a building’s structure and its fixtures over time. It is described as a non-cash deduction because the investor does not need to spend any money to be able to claim it.

Property depreciation can be claimed in two ways; via capital works deductions for the decline in the building structure, and for the depreciation of plant and equipment items. Though the ATO restricts capital allowance depreciation claims based on the construction date of the property, property owners of all property types will receive significant deductions for claims on the fixtures and fittings contained within the property.

Legislation states that for any residential property in which construction commenced prior to the 15^th of September 1987, the owner will not be able to claim capital works deductions. For commercial buildings, this date is the 20^th of July 1982. There are no date restrictions for a claim for the depreciation of eligible plant and equipment items contained within the property. The amount of depreciation available as a claim for these items is dependent on the condition and quality of each item and is measured based on their individual effective lives as set by the ATO.

For the owners of investment properties who have not previously made a depreciation claim, previous tax returns can usually be adjusted to recoup lost claims.

It’s recommended for all property investors to contact a specialist Quantity Surveyor, such as BMT Tax Depreciation, to arrange a tax depreciation schedule. Quantity Surveyors are one of the few professions qualified by the ATO to have the skills necessary to estimate construction costs for depreciation purposes. BMT Tax Depreciation has been completing tax depreciation schedules for over twenty-two years, and aim to ensure investors are maximising their returns from an investment property.

For a free over the phone assessment of the available deductions on a property, contact the expert team at BMT on 1300 728 726 today or visit the residential property depreciation page on the BMT website for more information.

Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.