ATO figures show property investors missing out on tax breaks

Figures released by the tax office suggest property investors are failing to claim their depreciation correctly, leaving thousands of dollars in unclaimed tax entitlements on the table.

Recent figures from the ATO indicate 2.8 million property investors claimed deductions relating to their rental property in the 2012-13 income year.

Analysis of these figures by BMT Tax Depreciation suggests that property investors are missing out on significant tax deductions.

“Of these investors, just over one million received an average capital works deduction of $2,113 while almost two million investors claimed an average deduction of $1,179 for depreciation of plant and equipment, making the total average depreciation claim made by property investors who claim both in the 2012-13 income year $3,292,” BMT stated.

“When compared with statistics released by the ATO for the 2011-12 income year, there was an increase of almost 100,000 in the total number of investors claiming deductions for their rental properties.

“Despite this, there was very little change in the average deductions claimed for capital works or plant and equipment assets.”

Speaking to AccountantsDaily's sister publication, SMSF Adviser, BMT CEO Bradley Beer said he is confident many investors missing out on these tax entitles are investing through their SMSF, and although SMSF trustees are typically “a little more sophisticated" than an average property investor, he believes they’re often not entirely across the depreciation benefits they can claim.

Further, he expressed concern about the change in the knowledge levels of SMSF investors over time.

“Since the borrowing rules over the last number of years have been relaxed around property for SMSFs, even though they've tightened them up again now, people were probably putting properties into SMSFs [when they shouldn’t],” Mr Beer said.

“They’re probably less sophisticated than what they were in the past, but possibly a little more sophisticated than the general investor into property,” he added.

KATARINA TAURIAN
Monday, 21 March 2016
accountantsdaily.com.au

Cristy Houghton

Embarketing, 48 Johnston Street, Wagga Wagga, NSW, 2650

Cristy's unique career has taken her from country NSW to the city lights of Clarendon Street South Melbourne and back again. With an early career in radio as a copywriter and creative strategist, she is now a Jill of all trades as a graphic designer, website builder, blog writer, video editor, social media manager, marketing strategist and more. 

In fact, give her any task and this chick will figure out how to do it! Go on, we dare you!

No, really, we DARE you!!

Cristy has won two Australian Commercial Radio Awards (ACRAs) for Best Ad and Best Sales Promotion, and even has an 'Employee of the Year' certificate with her name on it.

Cristy and her husband James have traveled extensively through Russia, China and South East Asia, and have two fur-babies, Sooty (cat) and Panda (puppy). Cristy loves drinking coffee, meeting people to drink coffee, coffee tasting and coffee flavoured cocktails. She also enjoys road trips, TED Talks and watching cat videos on youtube.