Investors all across Australia have been behaving rather tardily when it comes to claiming capital improvements deductions. Only about 40% of the investors are seeking “capital works” and “plants and equipments” deductions. Examine this figure; $17.5 billion lies with the ATO, the amount unclaimed by the investors. Our average claim is around $3,000 and it does not say much about our investors’ prudence.
Depreciation schedule
I think the first step is to have a precisely maintained depreciation schedule with us and this is possible if we hire a Quantity Surveyor right at the outset. An example of capital works deductions is a renovation made to a load-bearing wall. Similarly, when you change the hot water system in your home, you should be addressing concerns of the “plant and equipment” deduction.
When can you claim capital improvements deductions?
Capital improvements deductions cannot be claimed till the time a property is sold. It is only at the time of selling the property that the costs attached with improvements and additions are added to the property’s cost basis.
Some of the more frequent capital improvements may include, but are not limited to, areas of plumbing, outdoor, HVAC, and business.
Repair and maintenance deductions
Apart from capital improvements, you can claim deductions for repair and maintenance. Both of these deductions can be claimed up to 100%.in the year you pay the cost.
Repair deals with fixing damage while maintenance helps in preventing the damage in the first place. Think about a damaged fence and you will get an idea of repair work. On the same note, think about lawn-mowing and you will have a vision of maintenance.
Related Posts
