WITH THE RIGHT ADVICE you can achieve thousands of dollars in depreciation deductions on commercial property fit-outs. No matter what the industry you are in, claiming depreciation will help maximise your cash flow.
What is a Commercial fit-out?
A fit-out is the easily removable or mechanical assets added to a commercial property. Some common fit-out components include shelving, blinds, partitions, workstations and carpet.
Both the property owner and their tenant can claim depreciation deductions on the various fit-out assets they own.
Claiming Depreciation on a fit-out, how does this work?
Depreciation is defined as the natural wear and tear of a building and its assets over time.
A commercial property owner can claim capital works deductions on the building’s structure and any plant and equipment deductions for the assets they own. While the tenant can claim depreciation on the assets they own as part of the fit-out.
Given that both parties can claim depreciation on the same property, it can become rather complex. However, owners and tenants can ensure it’s a seamless process, by enlisting a specialist quantity surveyor.
BMT can provide separate tax depreciation schedules for owners and tenants that outline the deductions available for each party. We apply every depreciation ruling to the schedule – to ensure that claims are maximised, and compliance is maintained.
As such, tax depreciation schedules can boost cash flow even further – with the instant asset write-off and low-value pool available for eligible business owners.
Scrapping a fit-out
Many commercial leases specify that a tenant must remove their fit-out when their tenancy ends. It’s important for tenants to know that their fit-out can continue to boost their cash flow once it’s removed.
A process called “scrapping” allows them to claim the asset’s residual value as an immediate tax deduction. But a tax depreciation schedule must be in place, before and after the assets are removed – to ensure that this process can occur.
And the same applies for you … if you (as the landlord) own the fit-out and need to scrap it.
Start claiming Depreciation on your fit-out today
For over twenty years, BMT Tax Depreciation has been the commercial depreciation specialist – and has completed thousands of tax depreciation schedules across all commercial industries including hospitality, agriculture, retail and manufacturing.