I am reading a contract of sale and it states:
The vendor and purchaser agree that the value of any depreciable improvements, plant, equipment, fixtures and fittings owner by the vendor and passing under this contract shall correspond with the individual values assigned to each item in the Depreciation Schedule of the last Income tax return of the Vendors, but if any item does not appear in the Schedule or has no value assigned to it, the value is agreed to be ONE DOLLAR ($1.00) each.In English please?
Should I be asking for the depreciation schedule from the Vendor that he used on his last tax return?
If its a generic depreciation schedule and ie the split system air conditioner is not mentioned, is the value only $1.
I typically thought you obtain a new depreciation schedule every time you purchased a investment property.
Any thoughts would be appreciated.
Cheers
KarenThe vendor is under no obligation to disclose the depreciated value of any item within the premises hence you only pay a peppercorn for them and take whatever warranties are available to you as the purchaser. If you require a depreciation schedule, contact a QS. The only exception is if the vendor is selling new investment units, they may provide a depreciation schedule for you.
This is a clause dealing with plant and equipment, not building write off. With plant and equipment this always used to be a normal c;ause
I don't know that it matters for your tax purposes. I think you can depreciate items based on their values – but not sure on this.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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