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Tax Goldmines For Property Investors | Soho Carpool

April 8, 2020

Bradley Beer talks about what BMT Tax Depreciation does and shares tips for investors on this week’s Soho Carpool episode.

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Here’s the transcript of the video:

Bradley Beer, thanks so much for joining the Carpool series with Soho.
Great to have you here.
Yeah, Trent, great to be here. Beautiful day.
Driving around.
Let's talk tax. BMT, tax, property.
Maybe fill me in a little bit more, what do you guys actually do?
Give me the spiel.
Look we’re quantity surveyors is the first thing
which is someone who estimates construction costs of buildings.
BMT, a piece of that is doing that for the purpose of depreciation schedules.
So what we really do is we estimate the cost of a building.
We also add a whole bunch of tax rules to that
so we can work out how much depreciation someone can claim,
you know buildings get older, they wear out.
Properties, just like cars as we know depreciate in value pretty quickly.
Tax office allows us to claim a deduction for that on properties if they’re investment properties.
My job, go and make that number as much as possible, legitimate,
and give the numbers to the accountants to get you some more cashback on your tax returns.
Gotcha. I guess tax time is not too far away.
I guess end of the financial year, it's kind of close.
Are there some tax gold mines that you think, I guess, property investors miss out on
or what’s your views on that?
Well, I think that the biggest I guess gold mine is probably the fact that we see,
you know, the best part of 80% of investors not maximise that deduction properly.
Average deduction in the first year out of the reports that we did last year was,
you know, not far under $10,000.
$10,000 isn’t a gold mine but $10,000 is a deduction.
That's a non-cash deduction, it’s pretty good against your investment property.
So the biggest thing is not just not getting all the money out of it
that you should, like we help people to do that obviously
and you don't really want to leave your money at the tax office for someone else to spend, right?
Yeah, for sure.
Other things around when you do renovations and there's a big thing
that's probably missed out on a something called ‘scrapping’.
When you throw things away, if they still have some value left
they’re instant deductions in the year you throw them away
and they can mean a few thousand dollars.
Sometimes, you know, sometimes some of the items you put in there and the selection of those,
you know, certain items just select depreciate quicker
so good to think about making sure you select the right ones and you know,
you want to put things in there that make the property the best
and help you with the rental returns and valuations,
but if you can get a better tax deduction out of them as well,
then you might as well think about them.
For sure. I guess what are some of the common things that you would typically tax depreciate for within property?
Well kind of just about everything in there depreciates.
But where some of the differences can be made are probably something
a good example would be, let’s say, carpet versus tiles.
If you were to, you know, spend $10,000 on carpet in your investment property,
which is, I know, a high number, but I'll keep it round for easy math.
The first-year deduction on that, if it was a full year is about $2,500.
If you put floor tiles instead, they're claimed over a lot longer period and the first-year deduction is $250.
Right. Gotcha.
So sometimes, well if you don't care whether it's carpet or tiles,
carpet gets more deductions. I mean carpet’s nice to lay on, I suppose.
Yeah, for sure.
And then timber boards are different again in that space.
So if they're floating so, you know, just a little bit of knowledge about some of the things
you can put in there to get a bit of deduction in the early years.
I guess for property investors as I mentioned before, tax times not too far upon us.
What do they do? Contact details. They get in contact with you and speak to your team.
Yeah. What's, I guess the first steps?
Look, very easy, the website bmtqs.com.au
Lots of resources there to sort of learn a little bit about it if necessary.
Obviously, there's the guys that you can speak to, there’s a couple hundred people.
We talk depreciation all-day.
And there’s also some tools on the website that can help you put a
bit of information in about your property, the address
and things like that
and it can give you an indication of, or even without the address, details about what it looks like.
Yeah.
It can give an indication of what sort of deductions might be there
and some tools like PropCalc that can work out how much that means in difference to you
and what the cash flow of the property could be.
You can play around with and see what these things might-
see what things might do and change.
And they're all, all those tools are free?
Just hop on the internet and go for it.
All those tools are free and talk to our guys as well, will cost you a phone call.
To learn about whether your property's got sort of,
you know, deductions there that haven't been unlocked
and we can talk to you about that all-day
and you know, if we find some, we’ll go and do the job and then it’ll cost you some money, obviously.
Gotta get some real work.
Gotcha.
Bradley Beer, thanks so much for joining the Carpool series with Soho.
Great to be here. Thank you very much.
Awesome. Thanks, mate.
Soho
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