Have you heard of Low-Value Pooling?
Updated: Oct 2, 2019
Many property owners aren't aware of the beneficial methods they can utilise to maximise their depreciation deductions for qualifying their assets of plant and equipment.
One of these methods is low-value pooling, which involves depreciating your assets at an accelerated rate to increase tax deductions. Low-cost assets and low-value assets can be allocated into this pool to maximise your cash return, however it is important to know the difference:
- A low-cost asset starts its life under $1000.
- A low-value asset may have started its life much higher than the value of $1000 but as it depreciates, if its value falls under $1000, it may be considered a low-value asset.
At Archi-QS we will always include low-value pooling in all our tax depreciation schedules, boosting the cash return earlier for the property owner.
It is possible for a claim in a later year to be greater than the available claim in the previous year if there are items whose costs fall below $1000, enabling them to be placed in the low-value pool, where a higher rate of depreciation applies. Furthermore, assets costing (acquisition cost) less than $300 can be immediately deducted.