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Tax Refund, Second-hand Investment Property

Navigating the complex rules surrounding second-hand depreciating assets for residential rental properties can feel overwhelming. Nevertheless, here’s a guide to help you maximize your tax refund.

To ensure clarity, tax agents and accountants must transparently communicate with clients about the stringent rules the ATO has established for claiming depreciable assets for second-hand residential rental properties.

Identifying Second-Hand Depreciating Assets

First, it is important to understand what qualifies as a second-hand depreciating asset. These assets for residential rental properties include items that clients or another entity have previously used or installed and are ready for use. For example, previously owned appliances, fixtures, and fittings fall into this category. By recognizing these items, property owners can ensure they properly account for them in their tax deductions. Additionally, knowing which assets qualify can help in planning purchases and managing property expenses more effectively.

Understanding Deductible Expenses

Rental properties involve three types of deductible expenses over multiple income years:

  1. Borrowing expenses
  2. Amounts for the decline in the value of depreciating assets (allowed only in certain circumstances)
  3. Capital works deductions

However, sorting out these expenses can be challenging, as some are claimable immediately, while others must be claimed over several years.

Support from Endurego Tax

In conclusion, as the leading CPA accounting firm in Inner West Sydney, Ashfield, Belrose, Northern Beaches, and Adelaide, Endurego Tax provides clients with the necessary support by meticulously reviewing their files and books. We assist with tax planning and ensure that returns are correctly completed, maximizing allowable rental deductions for clients to optimize their tax refund and their tax position.