{"id":4864,"date":"2015-06-28T01:00:26","date_gmt":"2015-06-27T15:00:26","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=4864"},"modified":"2015-06-28T01:00:26","modified_gmt":"2015-06-27T15:00:26","slug":"what-is-tax-depreciation","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-is-tax-depreciation\/","title":{"rendered":"What is tax depreciation? – Brad Beer"},"content":{"rendered":"

 
\nIn today’s show\u00a0Brad Beer<\/strong> from BMT Tax Depreciation<\/a> explains more about how tax depreciation works, following a question<\/a> a few weeks ago from Sonya.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin:\u00a0<\/b> A couple of weeks ago, Brad Beer from BMT Tax Depreciation answered a question from Sonia. Sonia was asking about the depreciation schedules and how reliable they are as an estimate when you\u2019re calculating the viability of a purchase. We\u2019ve had a couple of calls following that from people wanting to know what tax depreciation is. How does it really work?
\nBrad Beer, I know this is a difficult task for you, but over to you.
\nBrad:\u00a0<\/b> Thanks, Kevin. Depreciation is a tax deduction for property investors. It\u2019s related to the wear and tear of items within a property. The carpet one day is going to wear out, and you get to claim part of the cost or the value of that carpet as a deduction each year.
\nIt also relates to other things in the building, including sometimes the building if it\u2019s the right age. You get to claim a certain percentage of the construction costs each year as a depreciation deduction. Similar to your car: you buy it, it depreciates. If you use it for business, you get to claim some of that.
\nHow it works as far as the rest of your tax is concerned as a property investor is you collect some rent from the property, then you have some expenses with the property \u2013 interest, rates, management fees, etc. If you are in a slightly negative situation there, and it costs you some money to actually hold that property, then you get to make a deduction against your other income for that loss you made against that property.
\nDepreciation is another tax deduction that will also go against your other income to increase the tax deduction, but you don\u2019t actually pay it out. It\u2019s a non-cash deduction. It means more deductions and, therefore, better cash flow on that property and more money in your pocket as property investors.
\nMany do get these other deductions but sometimes miss out on the depreciation because you don\u2019t see it as much. You don\u2019t pay it out, but it\u2019s wear and tear. You get to make a deduction, and that means more cash flow for you as an investor.
\nKevin:\u00a0<\/b> That was a pretty good summary, and you did that in a couple of minutes. It\u2019s a very complex subject. I guess it would be fair to say if you want to know a little bit more about it, you should always be working with your accountant, Brad?
\nBrad:\u00a0<\/b> Absolutely. We\u2019re one of the numbers in your tax return that\u2019s very important. We work alongside the accountant to provide the depreciation part, because you relate to that construction cost, and the tax office <\/b>accepts what we do. Talking to the accountant about the overall numbers is very important for making sure that particular number is done properly.
\nWe actually visit the property to come up with these numbers to help maximize that deduction and take the risk away from the accountant because the tax office will <\/b>accept our numbers, as well.
\nKevin:\u00a0<\/b> This might be difficult for you to answer, but how many investors in Australia would actually currently be using depreciation schedules?
\nBrad:\u00a0<\/b> There are a lot of investors using depreciation, but a lot are not using it properly. They may have made a guess or their accountants looked after it with a guess or they may think because it\u2019s an old property they can\u2019t get any. Old property still gets it. A guess is not the best way to do it. It needs to be done properly.
\nWhen we\u2019ve done some research in the past, we found that the best part of 80% of investors are not maximizing the deduction properly. What that means is you\u2019re letting the tax office keep your money and use it for something else.
\nDon\u2019t be one of those ones who actually has been missing out. You need to look at it properly so that you actually maximize those deductions and get the most out of that property that you\u2019re investing in for the future wealth of your family.
\nKevin:\u00a0<\/b> Check out the featured channel at Real Estate Talk that BMT Tax Depreciation maintains on our site. There is a lot more information there about it and the services they offer. There\u2019s also a direct link straight through, so you can talk to Brad Beer and his team at BMT Tax Depreciation.
\nBrad, once again, thanks for your time.
\nBrad:\u00a0<\/b> Great. Thanks, Kevin.
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

  In today’s show\u00a0Brad Beer from BMT Tax Depreciation explains more about how tax depreciation works, following a question a few weeks ago from Sonya.   Transcript: Kevin:\u00a0 A couple of weeks ago, Brad Beer from BMT Tax Depreciation answered a question from Sonia. Sonia…<\/p>\n","protected":false},"author":176692471,"featured_media":4865,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-4864","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"\nWhat is tax depreciation? - Brad Beer - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/what-is-tax-depreciation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is tax depreciation? - Brad Beer - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  In today’s show\u00a0Brad Beer from BMT Tax Depreciation explains more about how tax depreciation works, following a question a few weeks ago from Sonya.   Transcript: Kevin:\u00a0 A couple of weeks ago, Brad Beer from BMT Tax Depreciation answered a question from Sonia. 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