IF YOU OWN an Australian property built prior to 1980, there is an increased chance that some form of asbestos material was used in its construction.
If left intact, asbestos does not usually pose a health risk. However, when asbestos has been disturbed or damaged — the fibres within it become a health concern to anyone exposed.
Asbestos is Your Responsibility
Due to the serious health risks associated with asbestos, there are now laws relating to asbestos in most states and territories across Australia.
If you own a commercial building constructed prior to 31st of December 2003, it has to have an asbestos register and an asbestos management plan.
The person with control or management of the property, it is your responsibility to ensure that this register and management plan is current.
The asbestos register lists all identified and assumed asbestos within a building. And the asbestos management plan is require for a building containing any identified asbestos. It outlines the following information:
- The presence of asbestos
- Safe work procedures
- Control measures
- Emergency procedures
This management plan must be kept up-to-date and reviewed at least once every five years. And in a situation where asbestos becomes hazardous, it may need to be removed.
Your Asbestos Removal Costs may be Tax Deductible
For a property owner, the cost of its removal can be a large burden.
However, under Section 40-755 (Environmental Protection Act) of the Income Tax Assessment Act — a property owner is able to claim a deduction for the removal of asbestos from their income producing property if the asbestos poses a health risk.
The Australian Taxation Office allows you to deduct the expenditure incurred for the main purpose of carrying out environmental protection activities.
The removal of damaged asbestos from a residential investment property or commercial building is classified as an environmental protection activity. As its sole purpose is to prevent contamination or pollution of a property.
How to Gain the Most from Your Property Improvements
Basically, there are just two simple steps …
- When you are completing any improvement to an income producing property, including asbestos removal, contact a specialist Quantity Surveyor. They will capture the remaining depreciable value of items being removed for you.
- A post-work depreciation schedule should also be completed. Any replaced items and structural improvements are eligible to be claimed. This could mean a greater cash return from your investment property.
BOTTOM LINE: Asbestos can be a major concern for any investment property owner. Particularly when faced with the potential health risks, and if necessary, the cost of asbestos removal.
You can minimise your risks by making sure that each of your Commercial properties, built before 1980, have asbestos registers and up-to-date management plans.
If you are removing asbestos or making improvements to your properties, always contact a specialist to find out what kind of deductions you are eligible for.