Learning about different taxations can be troublesome for many; the confusing sections and documentation process may leave anyone perplexed. People often try to find different ways to calculate tax and ways to save on it. In this blog, we are discussing the tax depreciation report, which is also popularly known as a property depreciation report. It is a deduction against accessible taxable income which is generated by the commercial or residential investment.
What Is Mentioned In The Property Depreciation Schedule?
Understanding the taxation system can be cumbersome. Still, with the help of a qualified deprecation specialist, you would be able to get the right property depreciation report. They will assess the property assets and mention it in the report to make it easily understandable by the accountant. There are two broad categories mentioned in it :
- Plant and equipment depreciation – This includes all the property assets, which has a definite lifetime and their value tends to decrease over a period of time because of wear and tear or age. Some of the examples of such assets are lighting, carpets, air conditioning system, security systems, etc.
- Capital works depreciation– It includes all aspects of a building like renovation, construction, alteration or any kind of structural improvement. Some of the examples include an extension of garage, patio, renovating bathroom or kitchen, fencing, etc.
All these activities need to be included in the property depreciation report to get full return on your tax. Here the depreciation specialists or quantity surveyor comes into the picture. They will visit your place and inspect the property ensuring that all the items are listed in the deprecation report.
Is Tax Depreciation Schedule And A Tax Depreciation Report Different?
When you contact a depreciation specialist, you would have come across two terms, tax depreciation schedule and tax depreciation report or a property deprecation report. Well, both are actually the same thing, the fact that it is called the tax depreciation schedule is that it has everything listed in a schedule format. Depreciation report is the other name given to it, and hence, it is called as tax depreciation or property depreciation report.
What Are The Benefits Of Property Depreciation Report?
As we have discussed above property deprecation report brings with it a lot of information, it has complete details about the assets and capital works of the property. It is helpful in the following manner:
- A well-prepared report is produced once, and it contains all the expected depreciation for up to 40 years
- There are some firms that offer a money-back guarantee on the cost of the report.
- The cost of the report is also tax-deductible
- When it comes to preparation of property depreciation report, then the best time to prepare the same is when you are settling the investment property. But, that doesn’t necessarily mean that you need to do it at the time of settlement, you can do it at any time. However, if you have a property that was built before 1985, then, you will only get the claim on equipment and plant.
- There is a scope of additional cashback because the accountant can claim deprecation backdated by up to 2 years. But all this can happen when you have the right property deprecation report. All these lay in the hands of a good depreciation report specialist who will study the property and prepare the report.
From the above-mentioned points, it would be clear that the property depreciation report is a must if you are willing to get a good claim and also understand the taxation on the investment property.