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Capital Works Deductions - Often Overlooked

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A special tax deduction is allowed for the cost of construction of income-producing buildings.

This lucrative and ongoing claim is often overlooked by taxpayers and applies to both commercial and residential properties acquired after certain dates.

The claim can be significant. For instance, a rental property costing $300 000 to build gives rise to an extra $7 500 in tax deductions (at 2.5%). The claim can be made each and every year for 40 years.

The claim can also be passed onto subsequent purchasers (you don’t have to be the original owner) until the claim is expired over 25 or 40 years, depending on the original construction date.

Read more about Capital Works deductions on page 5 & 6 of BKB Edition 63 - Accounting for Residential Rental Properties.

Category
ABN
Published
14 Apr 2015
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