tax depreciation: quantity surveyor brisbane

Tax Depreciation Schedules secondary dwellings granny flats

Prices in the Australian real estate market are on the rise, and that means that many people have been forced to start thinking about where they can reasonably afford to live. Downsizing has become a common trend now, which may help explain why the demand for granny flats is growing on an almost daily basis. In fact, the most recent numbers taken from tax depreciation schedules suggests that the number of granny flats being constructed in Western Brisbane suburbs has grown by almost 25% in just 2 years. That trend is also taking place across the rest of the country, with granny flat construction going up by about 9% over that same two year period.

Brisbane Storey BridgeThe growth of this property type shouldn’t really come as any real surprise given state-level legislative changes in regards secondary dwellings. Those changes were introduced to try and make property prices in state capital areas a little more affordable for the average buyer or renter. A pair of different acts passed in 2009 and 2013 made it possible for property owners in NSW, WA, NT, ACT, and TAS to rent out a secondary dwelling to people that were not family or friends.  There is something of a win/win scenario at play with the whole granny flat situation. Renters find these types of properties appealing because of their affordability, while the owners reap the benefits of high rental yields that granny flats regularly bring.

Investors on average spend about $121,000 on the construction of a granny flat, with each property generally delivering an annual yield in the range of 15%. While that is a healthy return, investors still need to be aware that a proper understanding of depreciation schedules will help them maximize their yields. This is why it is usually a good idea to hire the services of a company who are well versed in how depreciation works to the benefit of the property investor. There are plenty of tables and charts showing how the depreciation schedule works, but those don’t always tell the whole story.

Property owners who have a secondary dwelling can take advantage of substantial reductions, even when they are the one who is currently staying in the primary residence on the same property. The potential savings over the first 5 years of ownership of a granny flat can go as high as $23,713. The depreciation deduction for the first year is $5,288, on average, but there are also depreciation deductions that can be applied to area that are shared by the primary and secondary residence. These include pools, patios, barbecues, and other common areas, with the amount that can be claimed dependent on the percentage of use by the tenant.

If you are not aware of all the potential deductions, you could very well be leaving money on the table. Talking to a professional who knows all about depreciation schedules will ensure that you get all the money you are legally due.

tax depreciation Quantity surveying