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Every property, is subject to wear and tear over time. This is called depreciation. Depreciation can be claimed by any property owner who obtains income from their property. While seasoned real estate investors know that they can make the most of property depreciation, new investors have little or no idea about it.
There are two types of allowances available: depreciation on Plant and Equipment, and depreciation on Building Allowance. Plant and Equipment refers to items within the building like light fittings, stove, carpet & blinds etc. Building Allowance refers to construction costs of the building itself, such as concrete and brickwork.
The Australian Taxation Office (ATO) allows property investors to claim this depreciation as a deduction of their taxable income. Claiming all the depreciation property investors are entitled to can make a significant difference to cash flow. CLICK HERE to find out more information.