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Supercharging your tax return through new builds
Tax law allows you to claim significantly more on brand new properties as opposed to existing ones. 
Depreciation on assets entitles you to claim on the decrease in value of your building, fixtures and fittings as they age. 
Depreciation is broken up into two main categories; Capital Works and Plant & Equipment.
 
Capital Works
This allowance is set out for the structure of the building and for fixed items within the building such as marble bench tops or wooden flooring.
Items that can be claimed go from the bricks of the building to the toilets in the bathroom - all of these individual items add up significantly and can mean thousands of dollars in your back pocket over tax time every year.
 
Capital works allowance is calculated at 2.5% over 40 years after construction for buildings built after 1987. (This equates to 100% over a 40 year period of ownership)
For residential properties this is something serious to note. Let’s say you purchased a home built 34 years ago, you would only be able to claim depreciation for the next 6 years.
 
Plant & Equipment
This allowance is set out for removable items. This can range from appliances like ovens and split system air conditioners to carpets and window blinds.
After legislislation introduced in 2017, this allowance can only be claimed on new Plant & Equipment. This means if you purchase an existing home, you won't have the benefit of claiming any of the items that come with it.
 
Claiming
Before you can claim deductions, you will need a depreciation schedule. This is easy to obtain and is done by a quantity surveyor. This schedule will map out the current value on everything that can be claimed. 
You’ll want to have this prepared as soon as possible after settlement as this will form your base cost and the newer your home and contents - the better the value.
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