Investment Property Depreciation in an SMSF

Home depreciation and how it can work for your SMSF

Home depreciation is the process of claiming tax reductions for the natural wear and tear on the investment property and its components and fittings. Depreciation deductions can considerably increase an investment property’s cash flow.

Every dollar of depreciation declared each and every year, decrease your gross income by the equivalent quantity, which can add up to thousands of dollars per year. The cash goes right to your bottom line and improves the cash flow of your SMSF.

To discover what tax reductions are possible for your SMSF, utilize the free BMT Tax Devaluation Calculator listed below:

Tax Depreciation Calculator
Declaring property depreciation

Trustees can use the services of a quantity surveyor to prepare a residential or commercial property devaluation report. One example of an amount property surveyor business is BMT.

BMT can provide devaluation schedules for a variety of investment residential or commercial properties. Their specialist group of Amount Surveyors will work with you and your Property Supervisor. They will visit the site and perform a detailed inspection of the property and complete a tax devaluation schedule describing the reductions your SMSF is entitled to. Superannuation Warehouse will then consist of these deductions as a claim in the SMSF Annual Return.

BMT Tax Depreciation Set up can save SMSF thousands of dollars:

The cost to the Quantity Surveyors

can be declared directly back in the same year’s tax return if the BMT Tax Depreciation Arrange is done before 30 June.
Devaluation Schedules are completed in CSV and Excel format for ease of use with accounting software.
BMT can assist your SMSF claim and increasing deductions, even if the SMSF has not declared additional depreciation in the previous 2 years’ income tax return.

To request a quote from BMT for deductions that your SMSF may be entitled to claim, please click on the button below:

Request a Quote
What an SMSF can claim as financial investment property reductions

A Financial investment Home must have been built after 1985. The ATO residential or commercial property depreciation legislation includes 2 unique sections– Departments 40 and 43– that cover reduction available for various parts of the home.

Department 40 covers the devaluation of plant and devices
Department 43 covers the depreciation of capital works

Additional suggestions and considerations …

The older the home, the lower the reduction you will be able to claim. This is because you can’t claim devaluation on the structural elements of a home built before 1985.
Declaring residential or commercial property devaluation will not only substantially decrease SMSF taxes, but it may also turn an adversely tailored financial investment into a positive, lucrative one!
And, if your property is currently making money, claiming property devaluation might make it even more lucrative.
Remember if you buy a residential or commercial property by making a loan in the SMSF, you need to have a Bare Trust. For more info associating with Bare Trust, please see here.

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