https://cdn.homesearchsolutions.com.au/wp-content/uploads/2019/06/02225812/hs-logo-color.png 0 0 Henry Wilkinson https://cdn.homesearchsolutions.com.au/wp-content/uploads/2019/06/02225812/hs-logo-color.png Henry Wilkinson2009-04-22 09:00:412017-08-15 18:04:54New Unit Depreciation
Many financial planners and investment property “experts” advise people to buy brand new units so that they can get the tax depreciation benefits, which can be offset from their personal income for their annual tax return.
However from what I have seen from many of these brand new “generic” units over the past 10 years, particularly ones in medium to large complexes, is their relative lack of capital growth compared with say older style art deco units or even 1960/70’s buildings that are in a better location (for Sydney – near beaches, inner city, harbour etc).
A new investment property buyer claims depeciation expenses on an annual basis, but when eventually selling the property they have to add back in the total of those benefits claimed for capital gains tax calculations anyway, thus negating the benefit in the overall property transaction.
The bottom line is that the tax depreciation benefits gained by buying new units will rarely equal the extra capital growth achieved with buying an older style unit in a better location.
Many new unit complexes tend to be built in former industrial areas or on the city fringes because the land is cheaper, and are often not close to amenities.