What commercial property tax deductions can I claim on my commercial property?
Many commercial property owners are unaware of what they are entitled to claim and in turn miss out on claiming thousands and in some cases hundreds of thousands.
Below is a free checklist, which is a general guide, that you can use to discuss with your accountants and advisers when it comes to claiming your commercial property tax deductions.
Accountants fees, Bookkeeping fees and fees for accounting software;
Advertising the property for rent;
Agents fees and commissions for property management;
Cleaning – internal and external (windows, pool etc), gardening, lawn maintenance, pest control;
In-house audio and video service charge (e.g. Foxtel) not paid for by the tenant;
Lease preparation, registration, stamping;
Legal costs for recovering unpaid rent, seeking damages for breach of agency agreement, reviewing tenant credit worthiness;
Quantity Surveyor report – for claiming Capital Allowance and Depreciation (as referred to below);
Rates (council and water) that are not paid for by the tenant;
Security monitoring costs;
Finance expenses and borrowing expenses
Bank charges – for accounts used for collecting rent and paying out goings;
Borrowing expenses – e.g. search fees, valuation fees, survey and registration fees, stamp duty, broker’s commissions, mortgage insurance, etc. (Note: borrowing expenses are deductible but not all at once – check with your accountant);
Interest expense on the loan;
Mortgage discharge expenses and penalty interest on early loan repayment;
Pre-payments – full amount deductible up front if less than $1,000 and relates to period of less than 12 months (confirm with accountant).
Insurance Premiums – building, contents, public liability;
Mortgage insurance – treated as a borrowing expense.
Costs for repairing and maintaining commercial building
Repairs and maintenance during the tenancy (initial repairs will be considered capital improvements and written down over time).
Quantity Surveyor Related Deductions
Included in your tax depreciation schedule:
Division 43 claims for building, capital improvements – an annual write-off for the depreciation of the building and/or any structural improvements or additions – use a depreciation schedule prepared by a quantity surveyor to report on qualifying works.
Depreciation of Fixed Assets
Division 40 assets e.g. carpet, blinds, hot water system, air conditioning etc – use a depreciation schedule prepared by a quantity surveyor.
Disposal of Assets or Scrapping
eg. carpet, kitchen cupboards, curtains. Any effective life technically still existing within an asset has a value, and the value becomes an immediate write-off when the item is scrapped.
Capital Claims Tax Depreciation are experts in commercial property depreciation. Our expert team combined has over 35 years- experience in commercial tax depreciation. We help both investors and owner-occupiers get the most out of their building. Our tax depreciation service helps your business with allow you to inject monies elsewhere.
To discuss your commercial property depreciation schedule please contact our Senior Tax Depreciation Specialist, Alex Konjarski on 1300 922 220 or email him at email@example.com.
For further information about commercial property depreciation visit our website here.
Other general holding costs
Body corporate fees (excl special purpose levy contributions for improvements, initial repairs);
Postage, stationery, telephone calls and rental (when related to dealing with real estate agents, tenants, services and other matters related to the rental property).
Paperwork to assist your accountant
Bank statements for property related accounts – income and expense accounts and loan accounts;
Invoices and receipts relating to your property expenses;
Insurance documents outlining your insurance premiums;
Statement of income and expenses from your property manager;
Tax depreciation schedule (quantity surveyors report).
Commercial property tax deductions: check with your accountant!
The information above is a general guide on what you can claim on your commercial building. We do recommend that you discuss further and confirm your claimable expenses with your accountant or the ATO upon completing your financials.
If you are needing to engage an accountant for your commercial building, we work with proactive property accountants! We would be happy to recommend one to you if you should need.