Investors overlooking depreciation benefits: CBRE

Investors overlooking depreciation benefits: CBRE
Investors overlooking depreciation benefits: CBRE

Investors are missing out on thousands of dollars worth of tax deductions by failing to take advantage of depreciation benefits, according to CBRE.

The real estate services company last week launched a tax depreciation service aimed at Australian residential property investors.

“It’s astronomical the number of people who are unaware of the depreciation benefits that are available to them,” said CBRE Capital Allowances National Director Neale Scott who leads the division.

Owners of new properties could often claim 2 to 4% of the purchase price in depreciation in the first year of ownership, Scott said. On a newly constructed property purchased for $400,000, for example, the depreciation benefit could be between $8000 and $14,000 in the first year.

“It’s significant,” Scott said.

But many investors did not know they could claim such deductions by obtaining a tax depreciation schedule for the property.

“There is a lot of reliance on accountants to do this work but accountants are the ones who use the schedules; they don’t prepare them,” Scott said.

A number of other companies can prepare tax depreciation schedules for investors.

Scott said CBRE had a large residential valuation business and could use its existing infrastructure to offer a cost competitive service in preparing depreciation schedules.

The scale of its business meant it could prepare the reports in a shorter time frame than many of its competitors. It aims to deliver depreciation schedules to its clients within five to 10 days.

“For every [depreciation schedule] that we do, we fully inspect the property which is also a massive point of difference,” Scott said.

The service is available across all metropolitan areas.

CBRE launched its Capital Allowances business in Australia about 12 months ago initially targeting commercial and agribusiness sectors.

“The addition of a residential platform enables us to offer a full suite of property and tax depreciation services across all sectors,” Scott said.

The business specialises in formulating depreciation schedules and providing associated advisory services, including preparing property reinstatement costs and depreciated replacement cost assessments. 

Zoe Fielding

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.

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