Adam, I can tell you the exact price of a Tax Depreciation Schedule in Cairns – $715 GST inc.

That’s the same price we charge for Canberra, Darwin and Albury (+ loads of other places).

Can you get cheaper schedules? Yep. I see them all the time. Will they pass scrutiny by the ATO? Not always.

As for an inspection this week, you’re pushing it.…[Read more]

It depends on the extent of the work and how switched on a person’s accountant is.

Let’s say someone has a pre 85 property that they do a quick reno on. So all they do is chuck out the stove and some carpet and throw a bit of paint around. In this instance, much as I’d like to take their money, they’d be wasting their time paying for a Schedule.…[Read more]

Yep, keep your receipts.

The ATO reasonably expect someone who renovates an investment property to only claim for what they have paid for. Receipts are proof of money spent. You can’t claim for your own labour and if you have tradesmen who work for cash without paperwork you won’t be able to claim what you’ve paid them.

Where possible, try and…[Read more]

Redwing,
Mango trees have a 30 year effective life.
Scott

No, ‘Hotvaluer’, the underlying value of an asset is not at all the same as market value. This distinction is particularly relevant in country towns. But you have indicated you aren’t interested in this discussion any longer. Good luck.

Hi Marisa,

There are lots of cases where a depreciation schedule wouldn’t be required:

As Rob said, there may be no depreciation available. Let’s say you own an older (pre 85) unrenovated house and you lived in for 10 years before renting it it out. There wouldn’t be much depreciation left to claim.

Or if you buy an old, unrenovated property…[Read more]

I said in a post some time ago that we were getting lots of calls from people who had invested in Mt Isa. Sure, they were picking up properties with decent yields, but what concerned me was the underlying value of the assets. If the block was worth, say, $20K, and the house $40K, paying $80K for it didn’t make much sense to me even if it was…[Read more]

I don’t see why not, but I’ll need to confirm. If you’ve entered into a contract to pay, taken delivery of something, and installed it in a property, you should be able to depreciate it. There’s a logic to this. Having said that, ATO logic isn’t sometimes different from yours or mine. Can you send me a PM and remind me to check on this one?
Scott

They are Misty, but it would depend on how they’re being used and the number of trees. If it’s a house on an acreage and there are just a couple of trees whose fruit is consumed by the tenant, you’d be pushing it. If it’s a business and there is an orchard then the trees would theoretically be an income producing asset. Grape vines are treated…[Read more]

Hi Derek,
Accomodation built for short term travellers is still depreciable at 4% (building).

I think it was May last year when the ATO released an Interpretative Decision on what constitutes ‘short term traveller accomodation’. It is prudent to abide by Interpretative Decisions as they tend to be an ATO reference point in the event of an…[Read more]

Hi Jack,
I’ve bought one through them – a holiday unit on the NSW coast. They seemed okay. No sign of any two tiered nonsense. They would have a big data base and would be used by developers to flog property. I didn’t pay alot of attention to their cash flow projections – I just figured they would be inflated. I did some sniffing around of my own…[Read more]

Yep. Perth is easy, but the rest of WA is tricky – it’s a big state and QSs tend to live in cities. I believe one of my Perth guys is heading to Kalgoorlie in the next week or so. The east coast is easier to cover because there are lots of big regional centres. I’ve got guys in Cairns, Townsville (Mackay from memory – system is down) Rockhampton,…[Read more]

Gee Derek, and we were getting on so well. You’re plugging Deppro when I’m in here dispensing free advice?

Luke, I’ve got guys in Perth, too. In fact we cover more of the country than any other QS group. And we only use Quantity Surveyors to carry out inspections – one company that shall remain nameless say they do but they don’t.

Re: Your 70’s…[Read more]

I like little blocks of units. That one sounds very expensive relative to the returns, though. At $100K each for a one bedder, the location must be good – capital city? ocean views?. There was string in the forum not so long ago about converting blocks to strata title. Not sure whether a definitive list could be put together from the comments.…[Read more]

I settle on my first ever off-the-plan purchase toward the end of June. And no, it’s not a city apartment. It’s a holiday unit in Port Macquarie – 30% on paper gain since contract exchange. And the bank will lend on the current valuation. It will be very -cf (loads of depreciation, too). There’s also a place in Tasmania I’m looking at. It will be…[Read more]

Given the ATO will be looking very closely at property investors this year that may be wise Marisa.

No idea Shaun.
When I look for a competent professional – solicitor, doctor, architect, mechanic – their fee per hour is the last thing I consider. I’m always willing to pay a bit extra for someone who knows what’s they’re doing. I figure it’s possibly going to save me problems down the track.
It’s the same in my business. There are loads of…[Read more]

Hi Marisa,
Derek is right, in the event of an audit you would need plenty of evidence to support any assertion that the proerty was available for rent and available at a market rate. I’d say the ATO would find it hard to swallow the fact that you had no luck at all renting it out. You need to imagine yourself sitting across the desk from an…[Read more]

Hi Marty,
You only pay tax on any depreciation claimed on the building, not on the Depreciable Assets/Fixtures and Fittings. In many cases, depreciation claimed on the building is less than that claimed on the Assets.
Scott

Not quite James.

There is a fair bit of confusion around depreciation. It’s divided into to 2 main components: the building (=Special Building Write-Off or Division 43) and Goods and Chattles (=Fixtures and Fittings or Depreciable Assets).

It is only the depreciation that has been claimed on the building that reduces the cost base in the event…[Read more]