Depreciation.

Depreciating the cost of building is available for residential investment properties built after 17 July 1985. So, while those built prior to that date do not qualify to write-off the building they are able to depreciate the plant and equipment. While claims for building depreciation need to be supported by a qualified quantity surveyors report the ATO (Australian Tax Office) will accept your reasonable estimation of the value of the plant and equipment.

REPAIRS OR IMPROVEMENTS

Repairs and maintenance are deductible, not improvements. For example if, during the time of your ownership, tiles fall off the wall, to replace them would be a repair, whereas if the house needed re-tiling at the time of the purchase, that would be an improvement and not deductible. No deduction can be claimed for your own labour.

Be sure to make repairs only when the premises are tenanted.

Work that replaces the whole of a fixture or a fitting is an improvement, not a repair. So don't demolish and replace, say a fence, just replace the damaged area.

Tree removal is claimable if the trees have become diseased, infested or are causing damage, all during the time of ownership. It is not claimable if it may cause damage in the future or if, for example, you are sick of cleaning up the leaves.

DEDUCTIONS FOR FIXTURES AND FITTINGS (Division 43)

Before a Division 43 deduction can be successful a taxpayer must establish, to the satisfaction of the ATO -

* the scope of the work done,

* the date at which the work was done,

* the cost of the work, and

* whether the work qualifies for a Division 43 deduction.

If you are unable, or unwilling, to obtain reasonable proof of these facts, you are not entitled to a Division 43 deduction. If you claim a deduction without the required proof you could have your claim rejected and be liable for penalties. Ideally the claim should be based on formal documentation, which may take the form of architectural drawings, specifications, contract documents, receipts or photographic records.

Article Source: http://EzineArticles.com/?expert=Neil_Handley

About the writer -----------------------------------------------------------------------------
Neil Handley graduated as a Bachelor of Economics and Accountant. After some 20 years as a stock broker Neil turned to property development. He then acquired a controlling interest in a property development company listed on the stock exchange and became CEO. He has been involved in developing residential subdivisions, industrial subdivisions,shopping centres, office buildings and medium density residential dwellings in Sydney's north shore, Northern Districts, Parramatta and Liverpool areas and on the Gold Coast, Queensland. One office building was sold to the AMP for $25ml. Neil's company advises on building wealth via property.
Go to  http://www.specialstrategies.com  .


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