The general consensus amongst leading economic commentators is that the Coronavirus will lead to a major economic slump both in Australia and internationally over the remainder of 2020.
For example, Westpac's chief economist Bill Evans dubbed the rate whisperer for his consistently accurate forecasts on the RBA's cash rate calls, has predicted a 2020 recession in Australia because of the impact of the Coronavirus.
On a quarterly basis, he expects the economy will contract in both the first and second quarters by 0.3% respectively. This would mark the first recession in Australia since the early 1990s.
To help offset a possible recession, the Federal Government has just announced a $17.6 billion economic stimulus package that includes tax relief for businesses, one-off cash payments for welfare recipients and money to help keep apprentices in work.
Significantly, medium and big businesses will be encouraged to spend on equipment and other investments through an extension of the instant asset write-off, which means they can claim a tax break for what they spend.
This attractive tax depreciation benefit is currently restricted to companies with turnovers of up to $50 million, for maximum investments of $30,000.
But this benefit will now be significantly lifted, allowing companies with turnovers of up to $500 million to make assets write-offs of up to $150,000.
The major extension of this tax deprecation benefit will help many businesses in Australia to better work through the coming economic downturn.
At the same time, many individuals who own property investments can boost their cash-flow during the coming economic downturn through claiming the already generous tax depreciation benefits associated with the property.
It is estimated that each year hundreds of millions of dollars in legitimate tax benefits are never claimed by property investors throughout Australia.
This occurs because many property investors do now use the service of a qualified tax depreciation specialist to identify items throughout their property that can be claimed for tax depreciation purposes.
These 'hidden' tax benefits can amount to thousands of dollars in additional tax benefits for individual investors each year if they are correctly identified.
With the 2020/2021 financial year fast approaching, it is important that property investors engage the services of an ATO compliant tax depreciation company to undertake a tax depreciation report for their properties so they can fully claim their generous tax depreciation benefits.
The reality is that many Australian property investors are unaware that a tax depreciation report undertaken by a professional tax depreciation company can identify hundreds of items in an investment property for which you can claim legitimate depreciation benefits.
For example, it may surprise many property investors that even garden gnomes can be depreciated for tax purposes. Under taxation ruling, TR2006/15 garden gnomes can be depreciated for tax purposes as plant over their economic life.
Many investors in Australia totally underestimate the number of items that can be depreciated for tax purposes and this comprehensive list can even include in addition to garden gnomes, cubby houses and if they own an apartment, then common areas such as car parking and recreational facilities.
The tax benefits associated with negative gearing can be very significant with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property. In some cases, these tax benefits can total $300,000 based on a purchase price of $500,000.
Depreciation is a complex area of taxation that requires a professional company such to undertake a depreciation report because of constant changes in rules