Sorting Out Your Finance and Money Situation

Tax Depreciation Schedule: Important Tips for Working with Quantity Surveyors

13 January 2023

Terry Porter

Real estate property depreciates in value as the structure and the attached equipment age. The deterioration causes loss to the investor, so the government allows the property owners to claim depreciation losses as a tax deduction. Therefore, if you have purchased commercial or residential buildings, you must prepare a tax depreciation report before filing returns. Unfortunately, calculating the value of depreciation for a building can be challenging, and mistakes will reduce the value of deductions. You can promote valid results by working with a quantity surveyor when preparing the depreciation schedule.

Here are crucial guidelines on depreciation and taxes for property investors.

Choose a Good Quantity Surveyor

You should choose the best quantity surveyor for the assessment of your property for taxation purposes. Remember, deductions are scrutinised to avoid illegal gains, so an unqualified individual could cause problems like audits and penalties. When hiring a professional, choose a specialist with tax agent credentials. Make sure the individual or firm is registered as a taxation practitioner. Also, check the level of support provided by the quantity surveyor. Where possible, use a full-service business instead of hiring a separate firm when filing tax returns. Additionally, ensure they have a good reputation by checking online feedback and contacting past customers.

Know the Taxation Legislation

The primary benefit of working with a quantity surveyor when preparing a tax depreciation schedule is their understanding of the laws on allowable deductions. Keep in mind you can use basic calculator tools from online platforms to estimate the deductions. However, if you have a professional, they will examine your property and find the best application of current laws. Therefore, it is advisable to learn about taxation in preparation as a property investor. The information about the legal aspects will ensure you provide your quantity surveyor with all relevant details for maximum deductions. For instance, one of the common oversights in tax depreciation is overlooking renovations and furnishings. If you have improved your property to increase its value, you might be eligible for more deductions. Therefore, compile the data, and your quantity surveyor can explain its place in the depreciation schedule.

Discuss Missed Deductions

Finally, review the returns filed for your investment properties in previous years. This precaution is crucial if the right practices for tax depreciation claims were not upheld during the initial report preparation. Property investors can adjust the original tax submission for a limited period. Therefore, provide your quantity surveyor with your past tax deductions for property depreciation to determine whether the claim was undervalued. 

Reach out to a local quantity surveyor to learn more.

Share

Search