Hi All,
Just wondering, im sure the question has been asked before, if people can recommend a good quantity surveyor.
I’m currently looking at DEPPRO. Has anybody used them before. They charge now $550 for a schedule.
Would like to know who else is good in for the melbourne market.
Thanks in advance
vluu
Hello Vluu,
Deppro do a great job. Your on the right track by looking for a QS. They can save you hundreds.
David Femia
Femia Property Group
Property Investment Consultants
http://www.femiapropertygroup.com.auHi vluu27
I’m in Brisbane and am very happy with the service and information they provide
Take care
Dave [
][]Hi vluu,
Another company that i’ve heard is pretty good is Depreciator (www.depreciator.com.au). I haven’t used them myself so i can’t say for sure.Simon
I had Deppro do schedules for 2 QLD IP’s a couple of months ago. $440 per property. very good reports, better than others (from a different QS) I’ve had in the past.
Rod.
Hi All,
Steve has an EXCELLENT example in his new book regarding claiming for Depreciation. It goes along the lines that when it comes to selling the property, the amount of Capital Gains you’ll be taxed on will take into account the depreciation you have claimed.
Eg. Buy a place for $190K sell 5 yrs later for $240K = CG of $50K. However, if you’re claiming $7K in depreciation each year you’ll be taxed CG of $50K PLUS (5yrs x $7K) = $85K.
The difference after the 50% discount is applied for not claiming is a tax of $12,500 compared to a tax of $21,250. At the end of the day $50K-$12,500(=$37,500) appears so much nicer than $50K-$21,250(=$28,750).Moral of the outcome? Claiming depreciation isn’t a tax SAVING – it’s tax DEFERRING!!
Recommendation? BUY STEVE’S BOOK! It’s a wealth of information.
Cheers,
Shell.Yes, my accountant told me that too. In fact he said that you should only claim depreciation when your tax return needs it (ie to stop yourself forking out cash to the tax man). However in years where you are getting a return WITHOUT depreciation, do NOT claim depreciation.
Makes sense to me. Cause afterall, you are just deferring the tax with depreciation.
Hi all,
I bought Steves book yesteday..started reading it..funny he is a x-RMIT like me.
vluu
Eg. Buy a place for $190K sell 5 yrs later for $240K = CG of $50K. However, if you’re claiming $7K in depreciation each year you’ll be taxed CG of $50K PLUS (5yrs x $7K) = $85K.
The difference after the 50% discount is applied for not claiming is a tax of $12,500 compared to a tax of $21,250. At the end of the day $50K-$12,500(=$37,500) appears so much nicer than $50K-$21,250(=$28,750).Your figures are flawed, you’ve forgotten about the 5yrs x 7K you’ve already claimed. So you’ve actually received $50K-$21250+(0.5x5x$7K) = $46250.
This is because the depreciation claim is assessed at your marginal rate, whereas the CGT is assessed after a 50% discount.
Also I believe that it’s only the building allowance claim which is deducted from your capital base, not the fixtures & fittings claim.
Check with your accountant. (I’m not one).
Of course it’s also not an issue if you don’t sell.
Rod.
Someone please explain…now i’m more confused.
Good evening fellow property tycoons
Rod is on the right track
My understanding of the example given is:
Capital Gain $50K cgt tax rate (48.5% * 50%)= $12,125
Recouped Depn $35K @ marinal rate of 48.5% = $16975
Total tax payable = 29,125.
My preferrence is not to claim depreciation at all. Whilst tax breaks will be gained over the years normally at say 31.5% when property is sold all recouped depn is taxed in that year which throws investor into a higher tax bracket.
If depn is claimed one way to minimise the tax payable on recouped depn is to obtain valuation by a registered valuer. Particular reference to the increase value of the land component rather than the actual building. After all only land goes up in value. Buildings have a tendency to decrease.
I would welcome any comments
Best Wishes
Beancounter
Hi peeps
well the way i see it is if you dont claim depreciation you pay $12125 in CGT when you sell.
So overall CGT would be $12125If u claimed $7k depreciation at the marginal tax rate of 48.5c in the dollar then you would save $3395 in personal tax per year over the 5 years
ie $3395 x 5years is $16975 in personal tax savings over the period.So CGT would be worked out on $85000
ie 85000 x 50%= 42500 After 50% discount
$42500 X 48.5%=$20612.50Therefore we have the scenario.
No Depreciation claimed
we pay CGT of $12125Withe depreciation claimed
We pay CGT of $20612.50
We save in personal tax$16975
Overall tax paid is $3637.50
So technically you would be better off by $8.5K claiming depreciation if you were in the top tax bracket.
Then you have the situation as Rod said that fixtures and fittings dont get deducted from your capital base.
how does that look to u guys?Must stress tho , see your accountant
regards
Alex[8D]ps sorry about the long post
I don’t think anyone has mentioned the time value of money in this post. You may be comparing well and truely depreciated dollars against todays dollars. F/P = 2.7 after 25 years at just 4% inflation.
And just one more thing: Claimng for depreciation may be essential in keeping your head just bobbing above water, so that hopefully when it finishes after 6 to 8 years, your rent and personal income has inflated / been promoted to the point where it can compensate for loss of deduction allowance. So if the CGT is greater as a result, so what, at least I managed to keep the property long enough to get a substantial CG and not go backwards in my cashflow.
I just had a good service from a small company in Brisbane named Advanced Depreciation Services
(07 3889 1552). They were very thorough and under $500. They presented findings in report and a nice accountant-friendly spreadsheet just in time for my tax return.
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