Why wait all year when deductions can be claimed as you go?
Investors often look forward to the end of financial year, as many of the losses incurred from owning an investment property can be put back in their pocket. Expenses include interest, rates, repairs and maintenance, property management fees and depreciation deductions.
What many investors are unaware of is that they do not need to wait all year to claim depreciation deductions from their property. Instead, they can improve their cash flow throughout the year by nominating to use a Pay As You Go (PAYG) withholding variation.
By selecting a PAYG withholding variation, a property investor’s expected tax refund for the financial year is estimated. This allows their employer to take less tax out of their wages.
By including depreciation, the investor will receive $368, or an additional $196 in their fortnightly pay.
As it can be seen in the example, a PAYG withholding variation provides added flexibility for property investors. Having access to extra money during the year makes it easier to manage cash flow, especially when faced with surprise costs. The additional funds also provide the property owner with an opportunity to invest or reduce their loan liabilities.
A PAYG withholding variation can make a significant difference to a property investor’s regular cash flow. A specialist Quantity Surveyor can add to this by providing a property depreciation schedule before you submit a PAYG variation request. Quantity Surveyors are one of the few professionals qualified under the Tax Ruling 97/25 to estimate construction costs for property depreciation purposes.
For obligation free advice about an investment property scenario, contact BMT Tax Depreciation on 1300 728 726 and speak to one of our expert staff.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au and don’t forget to mention The Successful Investor for a discounted Australia-wide service.