BMT has reminded investors and their advisers that it is possible for investors to claim tax deductions on specific items in investment properties that depreciate in value over time due to wear and tear or ageing.
Bradley Beer, CEO at BMT, said that many people will be surprised about what can classify as a deductible asset in a backyard, for example, and how lucrative unearthing these savings can be.
"There is a common misconception that depreciable items are only limited to what is inside your investment property," he said.
"Outdoor areas can often be overlooked and with tax time fast approaching, it's an ideal time for property investors and their advisers to ensure they are claiming all the legitimate tax deductions that these areas may hold."
According to Mr Beer, an in-ground pool is one of the most valuable outdoor assets, "as it can attract a first year tax deduction of up to $1,375 as well as the possibility of additional deductions of around $583 for associated filtration and chlorination systems".
According to BMT, freestanding outdoor barbecues could attract first year deductions of around $1,478, outdoor furniture could attract around $800 and solar lights could attract around $250.
Potential deductions will be divided into two categories – capital works deductions, which concern the structural elements of a backyard, and plant and equipment deductions, which include the removable features. The yearly deductions for an item are calculated on the basis of its effective life, determined by the Australian Tax Office.
"If you have recently renovated your backyard, take note of possible structural deductions as you may be able to claim 100 per cent of the items you have removed and replaced, such as retaining walls, garden sheds and driveways," said Mr Beer.
"As your tenants enjoy the outdoor areas of your property, it may pay to remember that you can as well by unearthing the tax savings these areas may hold."
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