Property Investors Best Kept Secret Unveiled

As a property investor, you will be familiar with property inspections, pest control checks and your general maintenance responsibilities. What you may not know, according to mortgage and debt management specialists Crown Lending, is how to make the most of one of the investment property market's best kept secrets-depreciation schedules.

"It's estimated that over 80% of property investors don't claim depreciation, simply because they don't know they can," says Crown CEO Scott Parry.

"A depreciation schedule is a report compiled by a Quantity Surveyor who assembles and assesses a list of all of the items in your investment property that are decreasing in value," he explains.

"As time passes by, the furnishings and fittings in your investment property can take a beating, and most property investors don't know that this 'wear and tear' can be tax deductible."

When compiling a depreciation schedule, a Quantity Surveyor takes into account a number of formulas, dates, types of items and percentages that are outlined, and updated as required, by the Australian Taxation Office.

The depreciation schedule becomes an inventory of all of the items in an investment property, with their effective life-which is the amount of use they are likely to have left-and a monetary value that can be claimed against the owner's taxable income.

A Quantity Surveyor has specialist knowledge of the construction industry that estate agents and valuers are not equipped with. They charge a fee for their services, but the good news is that this fee is also tax deductible.

"As well as giving you potential tax benefits, depreciation schedules can save on the amount of time needed to prepare and lodge your tax return. So when you're paying someone by the hour to do this for you, a depreciation schedule could potentially save you money," Parry adds.

"Property owners can use a depreciation schedule to estimate how much they should budget to make repairs or replace items in your investment property. This means you can plan ahead, rather than have to find a lump sum of cash years later when the items desperately need to be replaced."