Split reports help accelerate deductions
National quantity surveying firm BMT has reported a significant increase in Tax Depreciation Schedules for more than one owner, suggesting that co-ownership is becoming an increasingly popular trend.
Owning a property with others can provide improved purchasing power, which can be particularly useful in capital cities and other tight markets, where it can be difficult to break into the property market.
It can also balance out the expenses of owning an investment property including ongoing repairs, maintenance and fees. Additionally, co-ownership can provide improved depreciation deductions, allowing more items to be depreciated at a higher rate. This is where a Tax Depreciation ‘split report’ can assist.
How does a split report work?
A split report calculates depreciation deductions based on each owner’s percentage of ownership for each asset*. This involves splitting the value of the assets based upon each owner’s interest in the assets before applying depreciation rules.
Split reports such as those from BMT simplify the process for both investors and Accountants, and allows owners to receive a maximised return on their investment. Each split report can be provided in CSV format for easy importing into accounting software.
* Under new legislation outlined in the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 passed by Parliament on 15th November 2017, investors who exchange contracts on a second-hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on previously used plant and equipment assets. Investors can claim deductions on plant and equipment assets they purchase and directly incur the expense for. Investors who purchased prior to this date and those who purchase a brand-new property will still be able to claim depreciation as they were previously.
Visit www.bmtqs.com.au/co-ownership-example to see how a split report increases deductions for two owners.