CHOOSING WHETHER TO buy or to rent a Commercial property can often be a difficult decision. When you buy commercial property, you’re purchasing it with cash or loan proceeds. And when you have paid off the loan, you own the property outright. [Read more…]
RECENT RESEARCH SUGGESTS we are going to need 490,000 m² of new warehouse space per annum over the next couple of years – just to keep up with the current rapid consumer demand. This is the equivalent of about 80 football fields!
But do these big sheds make a good investment for those looking to invest in commercial warehousing? [Read more…]
CLEANING AND MAINTENANCE is a high priority for any commercial property owners or businesses.
Not only does it help achieve durability for property and assets, but it also improves the presentation and profitability of a commercial facility.
These costs can pile up quickly and squeeze money from bank accounts. But much needed relief can come in the form of tax deductions related to these cleaning and maintenance activities just in time for Spring.
Cleaning and maintenance can often work differently for commercial and residential owners. A commercial tenant tends to look after most cleaning and maintenance requirements necessary for their business operations.
However, as a commercial owner, You may find yourself in a situation where the cleaning and maintenance tasks have well and truly stacked up.
This could be for several reasons, such as a tenant not meeting their own responsibilities. Or maybe, you have purchased a property needy some TLC.
Whatever the case, commercial owners can claim any cleaning and maintenance costs as instant tax deductions, in the same financial year they are made.
Commercial tenants (the business owner operating from the property) undertakes cleaning and maintenance activities on a regular basis and they can claim any products purchased for this at tax time.
Sometimes, more detailed cleaning and maintenance activities must also be undertaken.
These are usually done by a professional external to the business, for example a handyman, machinery service technician or industrial cleaner.
Any costs associated with these types of services are 100 per cent tax deductible for the business.
Both commercial owners and tenants do need to be aware of the fine line between maintenance and improvements.
Maintenance can often be more extensive and turn into a repair. The good news is a repair is also instantly tax deductible. However, depending on the nature of the repair it could be an improvement.
For example, a damaged laminate bench top being replaced with a stone bench top. While the new bench top was a result of damage, it would be classed as an improvement – since the bench top was improved beyond its original state.
In this scenario, the bench top would need to be claimed over time using depreciation deductions. These are tax deductions for the natural wear and tear of property and assets over time.
Depreciation is claimed at tax time and the amount depends on the asset type and value.
This is why it’s essential to enlist a speciality quantity surveyor, such as BMT Tax Depreciation – to prepare a tax depreciation schedule, and ensure any depreciation is claimed correctly and to its full potential.
Bottom Line: A tax depreciation schedule is a report that outlines the deductions available for all depreciable assets held by the owner. If an improvement is made after the schedule has already been prepared, BMT can easily update the schedule to make the process of claiming ongoing depreciation easy.
JUST BECAUSE 30 JUNE has been and gone, commercial investors and businesses don’t need to wait another financial year to obtain a tax depreciation schedule. Even if a schedule is ordered after the end of a financial year (FY), depreciation can still be back-claimed. [Read more…]
WHEN YOUR SPECIALIST QUANTITY SURVEYOR tells you that you can claim depreciation on almost anything, they mean it. [Read more…]
YOU WILL FIND Commercial properties come in all shapes and sizes.
Office towers, warehouses, the local café, and farms are all examples of commercial properties. The flexibility and sheer size of commercial properties can offer investors the opportunity to own mixed-use commercial property. [Read more…]
Capital Gains Tax (CGT) is one of the more complex areas of tax legislation.
WHILE MOST INVESTORS just imagine a large tax bill, it isn’t a ‘one size fits all’ result for every business and commercial property owner.
So, let’s perhaps explore this in a little more detail. [Read more…]
STRUGGLING TO WRAP your head around everything to do with commercial depreciation?
Good thing is that you don’t need to know everything, that’s what the experts like BMT Tax Depreciation are for. The team has shared their top five commercial depreciation tips to help you claim more deductions.
While considerations like your overall investment strategy and budget come first, depreciation is another important factor when deciding on your purchase.
Depreciation will be one of the highest deductions you can claim from your investment property. It can be the make-or-break between a positive and negative cash flow, and often makes a significant difference to your back pocket.
Know what you can and can’t claim by getting a depreciation estimate completed by a specialist quantity surveyor.
Factors that impact the eligibility of claiming capital works deductions include the construction or improvement date, and the structure or fixed asset type. For example, you could claim depreciation on a concrete driveway, but not on a gravel one.
Eligibility requirements can be trickier for plant and equipment assets. Each plant and equipment asset has its own effective life, and this can change based on industries.
This means you may be eligible to claim depreciation on some assets longer than others. Some incentives that also apply to these assets such as the temporary full expensing policy are only available to businesses, not commercial landlords that don’t operate a business.
Depreciation differs between capital works assets and plant and equipment assets. Differences also apply between varying plant and equipment categories – a dishwasher doesn’t depreciate in the same way as a smoke alarm.
The effective lives and rates of depreciation determine how much you can claim now and in the future.
Let’s use a real example to demonstrate just how big a difference knowing this can make.
There are a number of myths surrounding depreciation in the commercial real estate market. Falling for these can result in thousands of dollars missed, so it’s important to get the facts and claim what you can throughout your property’s lifecycle.
The first misconception is that a commercial property may too old to hold depreciation, but this is hardly ever the case.
Any commercial property where construction commenced after 20 July 1982 will allow the owner to claim capital works as well as any eligible plant and equipment assets.
Even if the property was constructed before this date, capital works could still be available on any improvements made by the current or previous owner. For example, if a roof had to be replaced in 1995 then the current owner could still claim this deduction.
The second myth is that 2017 legislation changes apply to commercial properties, but this isn’t the case.
An owner can still claim depreciation on previously-used plant and equipment assets they now own. This includes any un-deducted value on assets the owner removes such as a previous tenant’s fit-out.
Bottom Line: The secret to claiming the highest depreciation deductions is found in consulting with a tax depreciation specialist.
BMT has been operating in the commercial and residential industries for over twenty years and has helped hundreds of thousands of people pay less tax.
AS YOU’RE PROBABLY aware, BMT Tax Depreciation has been providing depreciation services to commercial owners and tenants for over 20 years.
During this time, their team has ensured these businesses maximise these returns by claiming millions in tax deductions.
Despite being the only non-cash deduction you have available, many investors are not making the most of the opportunity – or in some cases, not even claiming it at all. [Read more…]
RENOVATING A COMMERCIAL PROPERTY can have a number of benefits – like increasing value, improving the functionality and attracting new tenants.
However, commercial property owners and tenants can literally throw away cash when they are renovating. [Read more…]
THE 2020-21 FEDERAL BUDGET introduced a number of new, temporary measures. The focus is to help boost the Australian economy out of this pandemic-induced recession, drive investment and to create more jobs.
This budget announced record-breaking incentives that are now available for businesses located Australia wide. [Read more…]
