Property tax allowances are a valuable aspect of any property investment due to their ability to enhance an investor's return and produce a better cash flow. However, a high level of expertise is required to ensure that investors obtain maximum allowable entitlements.

1. What are property tax allowances?
Property tax allowances form part of the Income Tax Assessment Act 1997 (ITAA 1997) and provide an opportunity for owners of income producing property to reduce their assessable income. There are a number of property tax allowances available to property owners, investors, and developers, including allowances for building structure and depreciation on plant. Property tax allowances are often simply referred to as tax depreciation.

2. Can property tax allowances increase my investment return?
Property tax allowances reduce an investor's assessable income, and by correctly claiming and maximising these deductions, investors can significantly enhance the after tax return from their investment and generate a healthier cash flow.

Simply Fill Out The Form Below - It's Easy! * First Name: * Last Name: * Address 1: * Address Suburb: * Your email address: * City: * Postcode: * Phone: * Av Household Income: Please Select 0-$39,999 40,000-$59,999 $60,000-$79,999 $80,000 + * Home Owner: Yes, I am Not as Yet If Yes, How Much Equity?: Select if Home Owner 0-$49,999 $50,000-$79,999 $80,000-$119,999 $120,000+ * Enter the security code shown:

3. What allowances are available for my investment?
Depreciation of plant (Division 40 ITAA 1997)
Depreciation allowances are available to owners of plant in both new and second-hand properties that produce assessable income. There is no legal definition of plant, however Income Tax Ruling 2000/18 lists over 850 assets that may be depreciable including carpets, air conditioning and light fittings. Depending on the property's specifications, furnishings and sale contract conditions, owners may be eligible to claim between 10% - 20% of the property's value as depreciable plant.

Deductions for capital works (Division 43 ITAA 1997)
Income producing buildings can be eligible for building allowances, provided construction commenced after 17 July 1985, or in the case of short term travellers accommodation after 20 August 1979. The rate of write-off is either 2.5% pa or 4% pa dependent upon construction commencement date.

Building allowances are calculated using actual costs of construction or refurbishment, excluding the cost of all plant and non-eligible items eg. land.

The following table shows an example of the property tax allowances available to property investors when claims are professionally prepared.