Tourist parks: Depreciation review - are you claiming your full entitlement?

The Australian Taxation Office (ATO) allows business owners to claim tax deductions for the depreciation, that is the loss of value due to wear and tear, of their income-producing commercial property. It is important to be aware of the specific depreciation rates and methods that apply to tourist and holiday parks, so that your park can claim the correct level of depreciation on your depreciable assets.

What does a BDO depreciation review involve?

A depreciation review will look at your tourist park’s depreciation schedule to identify whether you have claimed the maximum allowable depreciation on all plant and equipment. In a tourist park, plant and equipment may include:

• Cabins, villas, on-site caravans, other accommodation facilities
• Capital works such as amenities blocks, swimming pools, BBQ areas and playgrounds
• Cars and work vehicles including mowers, minibuses and tractors
• Any other business-related plant and equipment.

In addition to depreciation claims, deductions may also be allowable for capital works including new and improved park facilities that are fixed to the land, like a brand new reception building.

How will my tourist park benefit from a review?

Our experience with tourist parks has taught us that depreciation is the most commonly missed/under-claimed tax deduction.

A depreciation review will:

• Identify whether maximum allowable depreciation rates have been applied to all of your park’s assets
• Ensure that you minimise the impact of tax on your tourist park
• Ascertain whether you can improve cash flows through relevant depreciation methods.
• If BDO finds that you have not applied the correct depreciation rates to all of your park’s depreciable assets, it is possible to amend up to four, prior financial year tax returns in order to claim back your full entitlement.

Get in touch

To enquire about a depreciation review, or learn more about BDO’s tourist, caravan and holiday park services, contact your local BDO expert.