Many people often have a huge challenge when they want to reduce their tax liabilities. They look around their businesses or property and fail to identify any loophole they can legally use to cut down their tax expenditure. If you are one such investor who has just bought property, you can reduce your tax burden by using a well-prepared tax depreciation schedule. Depreciation occurs when an item loses value and costs less as time passes. A depreciation schedule thus lists items separately and illustrates how they have lost value over time. The lost value grants you the right to claim some tax relief and reduce your overall tax liability. Here are some must-haves for tax depreciation schedule to help you enjoy some tax relief:
Land Reclamation Procedures
When you buy land that is not in usable condition, you need to carry out some reclamation and restore its productivity. Pollution, erosion and deforestation are good examples of occurrences that can render land unproductive. Surveyors can use the depreciation schedule to show how the land has lost value over time and the reclamation procedures you have carried out to bring the land back into good shape. Planting trees on a large scale, extensive treatment of soil to remove pollutants and implementing erosion prevention methods are some of the things you can do to restore land. Listing them in your depreciation schedule can get you some tax relief, considering you are doing it for the good of the environment.
Outdoor elements and installations are another item you can use to get tax relief. Fences, paths and other items categorised as hard landscaping elements qualify for the tax deductions and generally reduce your tax burden. Survey the site carefully and identify all of them to help you claim the right amount of tax relief. Note that soft landscaping items such mulches and plants are not eligible for the deduction.
Before you carry out any renovations on your newly acquired property, bring in a quantity surveyor to make a tax depreciation schedule of the items that you need to dispose of. Even though they are on the land, obsolete and worn out items do not add any value, attracting additional tax you shouldn't be liable for. You are eligible to claim the residual value of the items you need to scrap and claim the applicable tax relief as provided by your taxman.