Are you maximising your depreciation entitlements?

Tax Depreciation can help ease the pressure this financial year and put more money back in your pocket! How? By making sure you obtain the maximum tax depreciation deductions from your child care centre.

Many child care centre owners are losing potential credits by failing to take full advantage of their centre’s tax depreciation potential. An often overlooked method of obtaining tax credits, property tax depreciation is available to any property owner who obtains assessable income by way of rent or operates a business from a property.

What is tax depreciation?

As a building gets older and fittings and fixtures within it wear out, they depreciate in value. The ATO allows commercial property owners to claim a deduction related to the building and the plant and equipment items contained within it. It can be claimed by any owner of an income producing property. This deduction essentially reduces the child care owner’s taxable income – you pay less tax!

What you should know

Your child care centre does not have to be new:

• Both new and old properties will attract some depreciation deductions. A common myth is that older properties will attract no claim.

• You can adjust previous year’s tax returns: When a property owner has not been claiming or maximising tax depreciation deductions, the previous two financial year’s tax returns can generally be adjusted and amended.

You can claim renovations completed by the previous owner:

Anything in the child care centre that is part of a previous renovation will be estimated by our quantity surveyors and deductions calculated accordingly. This includes items that are not obvious e.g. new plumbing, water proofing, electrical wiring etc. If you have completed renovations on the property since purchase, we can include those in your report as well.

What you can claim:

Plant and equipment items that can be claimed by child care centres include:

• Artificial Grass

• Food Processors

• Play Equipment

• Furniture

• Preparation Benches

• Refrigerators

• Bathroom Accessories

• Blinds

• Ceiling Fans

• Fire Alarms

• Microwave Ovens

• Rangehoods

• Shades

• Washing Machines

• Toasters

• Computer Equipment

• Cookers

• Partitioning

• Dishwashers

• Trolleys

• Vinyl

You should use a specialist to maximise your tax depreciation claim:

Quantity Surveyors such as BMT are one of the few professionals recognised by the ATO to have the appropriate construction costing skills to calculate the construction cost for the purposes of building depreciation. Not all quantity surveyors are tax depreciation specialists.

Examples of the real deductions available on child care centres

Deductions example Sydney

Plant & Equipment: Approximately $157,900
Building Allowance: Approximately $286,900
Total depreciation deductions - $444,800

Deductions example Brisbane

Plant & Equipment: Approximately $59,400
Building Allowance: Approximately $1,170,800
Total depreciation deductions - $1,230,200

Deductions example Hobart

Plant & Equipment: Approximately $148,400
Building Allowance: Approximately $1,251,600
Total depreciation deductions - $1,400,000

CLICK HERE TO OBTAIN AN EXAMPLE OF A DEPRECIATION SCHEDULE FOR A CHILDCARE CENTRE (PDF 400kb)

If you need assistance, talk to BMT, as we also provide a guarantee that if we can not find double our fee worth of deductions in the first full financial year claim, there will be
no charge for our services.

t: 1300 728 726 e: info@bmtqs.com.au w: www.bmtqs.com.au
 

Historical Independent Consultant Articles

Utilising your local community to market your centre Succeed Consultancy May 09
Equipping your new childcare centre Judius Educational Resources Sep 08
Finding the right staff for your team Expect a Star Sep 08
The benefits of using consultants Maximise Childcare Consultants Aug 08
Doing it right for the children Childcare NSW Jul 08
Buying a childcare centre Childcare Sales Australia Jul 08
The challenges of recruitment Succeed Consultancy Jun 08
A peek into business in the future Care Central Solutions Apr 08
Are you surfing the CCMS net? Care Central Solutions Mar 08
Building a strong team Succeed Consultancy Mar 08
Are you new to business? Here are some handy hints business.gov.au Feb 08
Preparing for the Child Care Management System Succeed Consultancy Jan 08
The Childcare Industry - A Valuers Opinion Egan National Valuers Jan 08
The Benefits of a Professional Employment Strategy Expect a Star Nov 07
CCB Acquittals: What are they? Am I losing money? Succeed Consultancy Oct 07
Traineeships - the future of childcare Expect a Star Oct 07
CCB: The Importance of a strong system Succeed Consultancy Sep 07
Are you ready to expand your business? Maximise Consultancy Sep 07
Take your centre to the next level Maximise Consultancy Aug 07
In the lead up to the first day Maximise Consultancy Aug 07
What to look for when buying... Maximise Consultancy Jul 07
10 Marketing Tips Marketing Angels Jul 07
Special Audio Interview Pt 1 Maximise Consultancy Oct 06
Special Audio Interview Pt 2 Maximise Consultancy Oct 06
Aged Care Sales Launch ACMA Aug 06
Who's Minding the Kids National Apr 06