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Episode 010 | Tax Depreciation (Case Study)

Here are the Case Studies mentioned in Episode 010 | Tax Depreciation of The Property Couch:

Tax Depreciation Case Study 1:

A $600,000 – $700,000 period home with a rental income of $22,880 per annum

An investor owns a period home purchased for between $600,000 and $700,000 with a rental income of $440 per week.
Expenses for their property such as interest, rates and management fees totaled to $40,950. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $9,880 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor to turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $3,655.
The following scenario shows the investors cash flow with and without the depreciation claim:

Tax depreciation case study 1 - The Property Couch
This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying out $219 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $149.

 

 

Tax Depreciation Case Study 2:

A $400,000 – $500,000 older villa with a rental income of $21,060 per annum

An investor owns an older villa purchased for between $400,000 and $500,000 with a rental income of $405 per week.
Expenses for their property such as interest, rates and management fees totalled to $29,610. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $7,930 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $2,935.
The following scenario shows the investors cash flow with and without the depreciation claim:

Tax depreciation case study 2 - The Property Couch

This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying out $104 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $47.

 

Case studies provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.

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