Commercial property depreciation is typically one of the most overlooked tax deductions for commercial property owners and leaseholders. By claiming deprecation, it can help improve your business’ cash flow.
Our client Roxy’s retail business in Sydney was entitled to claim over $51,000 in depreciation deductions in the first full financial year! See Roxy’s results below.
Whether you own the building or lease a retail business, gym, florist or tattoo salon, you are entitled to claim depreciation.
Commercial Property Building Owners
The commercial property building owner is entitled to claim depreciation for capital allowance and depreciation of the building known as Division 43 and for plant and equipment assets known as Division 40. Together they can generate substantial tax depreciation deductions.
If a fit-out is completed and any existing assets are removed the commercial property owner is entitled to also claim for scrapping.
A quantity surveyor can value and identify the age of those assets prior to them being removed. A pre-renovation inspection can be completed by the quantity surveyor or photo evidence will need to be provided of the assets prior to removal. This strategy can certainly help generate extra depreciation deductions!
Commercial Property Leaseholders
Leaseholders are entitled to claim for the depreciation deduction. They can claim for capital allowance and depreciation for any structural improvements or additions made to a building and make claims for plant and equipment assets paid for and installed.
A leaseholder is also entitled to claim ‘scrapping’ by removing their old fit-out that they completed to complete a new fit-out.
‘When talking to many of our clients, it’s often a case of – they “just didn’t know that they were entitled to claim it”. Both commercial landlords and commercial tenants have the opportunity to increase cash flow and return on investment by claiming substantial commercial property depreciation deductions for the capital works and depreciation of their building, fit-out and business assets.’ – Mark Wilkins -Director, Capital Claims Tax Depreciation.
Case Study
Our client Roxy leased an existing retail space located in Sydney in November 2019, where she completed a fit-out that totalled $120,555.
Roxy’s business grew and she expanded into next door and completed a new fit-out that totalled $386,908 in March 2022.
Roxy was entitled to claim for Division 40, Division 43 plus the scrapping of the old fit-out which totalled $29,081.
Roxy was entitled to claim in depreciation deductions after her new fit-out was completed:
‘I am absolutely over the moon with my depreciation results. Being a small business owner and especially with the cost of expanding, claiming my depreciation deduction has helped significantly. Thank you’ – Roxy Hill, client.
How do I claim for my commercial depreciation deduction?
To ensure the depreciation claims are maximised and compliant, you need to engage a specialist quantity surveyor to complete a commercial depreciation schedule.
A depreciation specialist will review the contract of sale, inspect, and assess the building and plant and equipment assets, and complete a schedule for the full effective lives of both Division 40 and Division 43.
Here at Capital Claims Tax Depreciation, we have more than two decades of experience and knowledge in tax depreciation.
Get in contact
We would welcome the opportunity to help you claim your depreciation deduction!
Call and speak to one of our commercial specialists Mark Wilkins or Alex Konjarski on 1300 922 220. Mark and Alex’s deliver maximum results for owners or lessees of commercial property and have over 40 years combined depreciation experience and knowledge!
