How to maximize on your property tax deductions

Your accountant is adept with numbers in terms of tax, you have a buyer's agent choosing the next hotspot on your behalf, even your own mortgage broker is at hand to help you identify the best loan. However, who can you rely on as far as maximizing your tax deductions is concerned? A quantity surveyor is your best shot. Read on for more insight.

Property tax depreciation

As your investment property gets older and items within it experience wear and tear, their value depreciates to some extent. The Australian Taxation Office (ATO) presents the golden opportunity to property owners to claim this value depreciation in the form of a tax deduction. Keep in mind that depreciation can only be claimed by an investor who generates income from their building. This means that you cannot claim depreciation on a property that's not income generating.

The tax depreciation schedule normally consists of 2 elements:

Capital works deduction: This covers the structural element of the property consisting mainly of fixed assets.

Plant and equipment deduction: This covers all the removable assets inside the investment property.

The role of a quantity surveyor

Traditionally, the role of a quantity surveyor is to measure structures and estimate building costs based on design blueprints and specifications to calculate the total cost of putting up the building in the present market at the given location. Quantity surveyors are recognized by the Australian Taxation Office (ATO) to possess the right construction costing expertise to calculate the value of items for tax depreciation or deduction.  The surveyor will assess your building, measure and record all depreciable assets, estimate the building costs of the property and document the value of the removal assets inside the property such as appliances. Armed with all this data, the surveyor will create a comprehensive depreciation report. Once the depreciation report is finished, your accountant can use it to file your tax return which will allow you tax deductions. 

Many investors ask why they can't just use their accountants to prepare the depreciation. Well, even though accountants can advise you on matters involving tax depreciation, they lack the expertise to generate a depreciation schedule needed to claim your tax deductions. It's only quantity surveyors who have the expertise to provide the actual numbers which will form the foundation of your tax return. 


Property owners should seek to work with quantity surveyors for their depreciation schedules. Further, the cost for creating a depreciation schedule is fully tax deductible which means it won't hurt your pocket in the long run.