Giving your investment property a makeover? What about Scrapping?
This extract looks at how to boost your deductions this financial year.
So it’s time to throw out the old kitchen, floor coverings, windows, ovens, dishwashers, and demolish a few things ready for a renovation. This in turn will improve your property, increase rent, market valuation and improve depreciation claims.
But what about the things you’ve thrown away?
What you throw in the skip bin is what forms the basis of the scrapping claims. Scrapping (or a scrapping schedule) is certainly an easier term to remember than the ATO’s “residual value write-off deduction”
The items that you have scrapped will generally have some residual value attached to them and those values will be claimable in the financial year they are removed (Provided the use of the item prior to being scrapped was to generate income from the item and that the property is income producing after the renovation has occurred). These can add up to thousands of dollars and are claimable in one go.
The work that you complete on the property will also be claimable as capital works and depreciable assets over the years and are based upon the renovation and improvement spend on the property.
There are rules and formulas around claiming these deductions so please speak with one of our team to discuss further.
Need help with investment property tax deductions scrapping?
Speak with Leenane Templeton on 02 4926 2300