{"id":5738,"date":"2015-09-11T14:43:58","date_gmt":"2015-09-11T04:43:58","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=5738"},"modified":"2015-09-11T14:43:58","modified_gmt":"2015-09-11T04:43:58","slug":"why-wait-earn-more-now-from-your-investment-property","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/why-wait-earn-more-now-from-your-investment-property\/","title":{"rendered":"Why wait, earn more now from your investment property"},"content":{"rendered":"

Claiming depreciation and using a Pay As You Go withholding variation can increase your fortnightly cash flow<\/b>
\nIn the lead up to the end of financial year, investment property owners will be considering what they can do to increase the return from their property.
\nThough investors often use negative gearing to offset the costs involved with owning a property, most have the aim to eventually use the property primarily as a source of income and to generate wealth.
\nProperty investors evaluating their current financial position and considering what options they can take to improve the cash flow gained from their investment should consider a Pay as You Go withholding variation (PAYG).
\nWhat is PAYG?<\/b>
\nThe PAYG method of tax collection was introduced in July 2000. This method replaced previous versions of the same system, such as Pay as You Earn (PAYE). The PAYG system allows investors to take advantage of deductions regularly, rather than in one lump sum at the end of the financial year.
\nThe PAYG variation estimates your expected tax refund for the financial year and allows your employer to take less tax out of your wages. An Accountant will usually organise the PAYG variation by submitting estimated financial information to the Australian Taxation Office (ATO). This can be done at any time during the year. For property investors, the tax liability is reduced based upon the anticipated deductions like interest, maintenance, rates, and depreciation on a rental property.
\nOnce a request has been made, the property owner\u2019s employer will reduce the amount of tax withheld therefore increasing their take home pay.
\nIt is important to note that submitting the PAYG variation does not replace a normal tax return. A tax return still needs to be filed at the end of the year to calculate the actual amount of tax liability.
\nProperty depreciation adds value to PAYG withholding variation<\/b>
\nMaximising property depreciation and capital works deductions will increase the cash return for property investors. Property depreciation will strengthen the PAYG withholding variation by reducing the investor\u2019s taxable income.
\nAs depreciation is a non-cash deduction; nothing needs to be spent to claim it. The ATO allows investment property owners to claim property depreciation due to the wear and tear and decline in value of a building and its fixtures over time.
\nTo support your PAYG withholding variation, a specialised Quantity Surveyor can produce a property depreciation schedule for property investors. The property depreciation schedule will outline all current and future depreciation deductions for an investment property. Under the PAYG withholding variation, the higher depreciation deductions are the less tax an individual needs to have taken from their regular pay packet.
\nBy obtaining a depreciation schedule straight after purchasing an investment property, the new owner can maximise returns immediately through the PAYG withholding variation.
\nA PAYG withholding variation provides added flexibility for property investors. Having access to the extra money during the year will make it easier to manage cash flow especially when there can be surprise costs. This also provides an opportunity for the property owner to invest the extra money or reduce loan liabilities.
\nExample case study<\/b>
\nThe following example shows the difference that claiming depreciation made in the first financial year, for the owner of a two bedroom inner city apartment purchased for $680,000. This apartment attracts a typical depreciation claim of $16,500 in the first full financial year. Annual expenses include interest, mortgage payments, management fees, repairs and maintenance.
\n\"What
\nThis example shows a difference of $6,105 per annum by applying property depreciation. Under the PAYG withholding variation the investment property owner will receive an additional $235 in their pay packet by claiming depreciation.
\nSpeak with a depreciation expert<\/b>
\nA PAYG withholding variation makes a difference to a property investor\u2019s regular cash flow. A specialist Quantity Surveyor can add to this by providing a property depreciation report before you submit a PAYG variation request. Quantity Surveyors are one of the few professionals qualified under Tax Ruling 97\/25 to estimate construction costs for property depreciation purposes.
\nTo learn more about tax depreciation for an investment property, visit the BMT Tax Depreciation Overview page by clicking here<\/a>. Alternatively, for obligation free advice about an investment property scenario, phone 1300 728 726 to speak to one of BMT\u2019s expert staff.
\nArticle provided by BMT Tax Depreciation. <\/b>
\nBradley Beer<\/b> (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT <\/b>Tax Depreciation.
\nPlease contact 1300 728 726 or visit www.bmtqs.com.au<\/a> for an Australia-wide service.<\/b>
\n\u00a0<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Claiming depreciation and using a Pay As You Go withholding variation can increase your fortnightly cash flow In the lead up to the end of financial year, investment property owners will be considering what they can do to increase the return from their property. Though…<\/p>\n","protected":false},"author":176692471,"featured_media":5744,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,25],"tags":[],"class_list":["post-5738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bmt","category-sponsored-channels"],"yoast_head":"\nWhy wait, earn more now from your investment property - 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\/why-wait-earn-more-now-from-your-investment-property\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why wait, earn more now from your investment property - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Claiming depreciation and using a Pay As You Go withholding variation can increase your fortnightly cash flow In the lead up to the end of financial year, investment property owners will be considering what they can do to increase the return from their property. 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