Dive into depreciation and save thousands
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Dive into depreciation and save thousands
Many hoteliers are unaware that their swimming pool holds thousands of dollars of depreciation value that can be tapped into with the help of a Quantity Surveyor such as BMT Tax Depreciation.
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BMT Tax DepreciationThe infographic above shows the impressive first-year deductions hoteliers are entitled to claim from a pool area.
Did you know that water can save you thousands of dollars each year at tax time? Water in a swimming pool, that is.
But it’s not just the pool that holds hidden value. Assets commonly found in a pool area such as pool furniture, lighting, paving, fencing and even umbrellas can save hoteliers handing over thousands to the tax office.
It’s no secret that a pool can be an extremely expensive addition to a hotel. Aside from the initial installation cost, hoteliers have to fork out a small fortune for water treatment, compliant pool fencing and signage, filtration and ongoing maintenance.
Hotel pools are governed by the Public Health Act 2010 and Public Health Regulation 2012, meaning owners must follow strict guidelines to ensure the water adheres to public health standards. Fortunately for hoteliers, pools are made a lot more affordable with the help of depreciation.
Bradley Beer, CEO of BMT Tax Depreciation
Depreciation is the wear and tear on a building and the assets within it over time. Legislation allows the owners and tenants of commercial properties to claim a tax deduction for this wear and tear called depreciation.
There are two types of depreciation allowances, as defined by the Australian Taxation Office (ATO). These are division 43 capital works and division 40 plant and equipment. The capital works allowance covers the structure of the property including the bricks and mortar, while plant and equipment depreciation covers easily removable fixtures and fittings such as ceiling fans and hot water systems.
The infographic above shows the impressive first-year deductions hoteliers are entitled to claim from a pool area.
In the first full financial year, the hotelier can claim $16,474 for the swimming pool, $6,094 for the pool furniture, $1,961 for the paving, $1,536 for the spot lights, $1,097 for the umbrellas and $297 for the pool fence. These pictured deductions add up to a huge $27,459 in the first year alone.
Over the first five years, the deductions skyrocket to $82,369 for the swimming pool, $17,520 for the pool furniture, $9,806 for paving, $4,415 for the spot lights, $3,154 for umbrellas and $1,485 for the pool fence. These deductions alone save hoteliers $118,749 over the first five years of claiming depreciation.
It’s important to remember that this is not an exhaustive list of the depreciable assets found in a common hotel pool area and there are many more items that can contribute to a depreciation claim.
As you can see, depreciation provides a substantial source of cash flow and can reduce the operational costs of the hotel, making additions such as a pool much more affordable.
Before you can dive into depreciation savings, it’s important to employ the services of specialist Quantity Surveyors such as BMT Tax Depreciation.
Quantity Surveyors are one of the few professionals qualified under Tax Ruling 97/25 to calculate building costs for capital allowance claims. With a tax depreciation schedule from BMT, you can rest assured knowing that deductions for all qualifying assets are maximised and your claim is ATO compliant.
Click here to view the BMT Tax Deprecation website.
See also:
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