{"id":8030,"date":"2016-05-25T10:00:52","date_gmt":"2016-05-25T00:00:52","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=8030"},"modified":"2016-05-25T10:00:52","modified_gmt":"2016-05-25T00:00:52","slug":"how-not-to-leave-any-money-on-the-tax-table","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/how-not-to-leave-any-money-on-the-tax-table\/","title":{"rendered":"How not to leave any money on the tax table"},"content":{"rendered":"

Brad Beer<\/strong> from BMT Tax Depreciation explains how you can get the maximum deductions available from your investment properties.\u00a0\u00a0 Handy advice in the lead up to the end of financial year.
\nTranscripts –<\/strong>
\nKevin:<\/b>\u00a0 In the lead-up to the end of the financial year, investors will be busily preparing their documentation to ensure that they claim the maximum deductions available for their investment properties, and why wouldn\u2019t they? Now, of all the deductions that an investor is entitled to claim, property depreciation continues to be the one that is most commonly missed. I wonder why that is?
\nBrad Beer, who is the Chief Executive Officer of BMT Tax Depreciation, joins us. Is this one of the most misunderstood deductions, Brad?
\nBrad:<\/b>\u00a0 Yes, I think it\u2019s misunderstood. Because you don\u2019t pay for it and it\u2019s a non-cash tax deduction is probably one of the big reasons that that is the case. People don\u2019t understand that if they haven\u2019t paid for it they may still be able to get a deduction for it. They don\u2019t really understand much about their investment property sometimes, so it\u2019s often missed.
\nKevin:<\/b>\u00a0 From your experience, how many actually miss out on depreciation deductions?
\nBrad:<\/b>\u00a0 We\u2019ve done some research, and probably close to 80% of investors don\u2019t maximize their deductions. It\u2019s not that they\u2019re missing out altogether, but it\u2019s that they\u2019re not claiming as much as they can claim. It\u2019s because they guessed, their accountant guessed, or they used some information provided. It needs to be done properly so that you can get the maximum deductions, because if you don\u2019t, you\u2019re just leaving cash on the table.
\nKevin:<\/b>\u00a0 You\u2019ve obviously looked into this. What are the most common reasons why investors don\u2019t claim all their depreciation entitlements?
\nBrad:<\/b>\u00a0 I\u2019d call two of the most common things. One is that people sometimes buy investment property without a full understanding about the numbers. I think you really should crunch numbers. The most common thing I hear is, \u201cThat\u2019s tax. I think my accountant looks after that,\u201d or \u201cI have got a good accountant.\u201d Now accountants are our friends, but accountants also sometimes need specialists in certain areas to make sure you\u2019re getting the most out of that property.
\nThe second most common thing I would hear is that people think old property doesn\u2019t get depreciation. It does. It\u2019s not as much, and there are some things about age that do matter, but the important thing is that old property still gets some depreciation. Let\u2019s find out how much, make sure it\u2019s worth it, and get it assessed if necessary.
\nKevin:<\/b>\u00a0 Someone who is listening now may be a property investor who hasn\u2019t been claiming depreciation or may be doubting whether they\u2019re getting it all. What should they do?
\nBrad:<\/b>\u00a0 It\u2019s really easy. We\u2019ve got calculators on the website or we could talk to you about your property. With the address, we can see some photos usually these days and get an indication of what sort of deductions could be claimed.
\nHave a check against your tax return and see what you are claiming, and if you haven\u2019t been getting it all you can easily go back and amend up to two years of tax returns and can potentially get some money back from the tax office, which is always nice.
\nKevin:<\/b>\u00a0 I have read on your site about the site inspection process. What is that?
\nBrad:<\/b>\u00a0 Depreciation is a claim on the wear and tear of the building and items within it. In order to work out what this claim is, it relates to the construction costs and the value of items in the property. In order to get that done properly, in order to find all of these things, we do a site inspection.
\nWe go out and visit. We\u2019re quantity surveyors. We estimate the construction costs of the property, we put the values on the items, we identify everything we can to claim as fast as we can. It\u2019s important for the site inspection to make sure we\u2019re thorough and we get everything we can so that we can maximize deductions and therefore your cash flow.
\nKevin:<\/b>\u00a0 Bottom line here, Brad, if we could. Could you explain the impact of depreciation deductions, and what sort of impact can they have on an investor\u2019s cash flow?
\nBrad:<\/b>\u00a0 It\u2019s a good question. Depreciation is wear and tear of items to create a deduction. As I say, a non-cash tax deduction, so you don\u2019t pay it out. What it means is a deduction that you don\u2019t pay out. On average, a first-year deduction\u2026 Against the hundreds of thousands of residential depreciation schedules we\u2019ve done, the first year claims around $10,000.
\nWhat that means is the first-year deduction is about $10,000 at your marginal tax rate. You get cash back in your pocket in some way. There are other numbers to be involved in this, but effectively it should mean if your tax rate is 47 cents on the dollar, it\u2019s $4700 in your pocket. If it\u2019s 30 cents on the dollar, that\u2019s $3000 in your pocket. So it is cash that you do get back if it\u2019s done properly.
\nKevin:<\/b>\u00a0 Brad Beer, who is the Chief Executive Officer of BMT Tax Depreciation, has been my guest. That\u2019s something you should look into. You can use the link that\u2019s on our website at RealEstateTalk.com.au to contact Brad and his team and just check. Find out whether or not you are getting all of those allowances that Brad has been talking about. Obviously, it\u2019s going to make you a lot happier financially.
\nBrad, thank you very much for your time. It\u2019s always great talking to you, mate.
\nBrad:<\/b>\u00a0 Thanks, Kevin. Great to be here.<\/p>\n","protected":false},"excerpt":{"rendered":"

Brad Beer from BMT Tax Depreciation explains how you can get the maximum deductions available from your investment properties.\u00a0\u00a0 Handy advice in the lead up to the end of financial year. Transcripts – Kevin:\u00a0 In the lead-up to the end of the financial year, investors…<\/p>\n","protected":false},"author":176692471,"featured_media":8032,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,34,36,25,28],"tags":[101],"class_list":["post-8030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-andrew-mirams","category-finance-topic","category-property-investment-topic","category-sponsored-channels","category-uncategorized","tag-podcast"],"yoast_head":"\nHow not to leave any money on the tax table - 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\/how-not-to-leave-any-money-on-the-tax-table\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How not to leave any money on the tax table - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Brad Beer from BMT Tax Depreciation explains how you can get the maximum deductions available from your investment properties.\u00a0\u00a0 Handy advice in the lead up to the end of financial year. 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