Forum Replies Created
- I just rang a quantity surveyor to get a dedepreciation schedule for my properties and she said that i’d be wasting my time cause i’ve done all the renovations myself and have the reciepts. Is this true
Hi Rob,
That QS could well be right. It depends in part on the extent of the renos and the age of the property.Scenario 1:
It’s a pre 85 built property. In the reno you gutted the place and ALL the fixtures and fittings are new. In this case, you would probably have receipts for everything that is depreciable and your accountant would be able to take care of it.Scenario 2:
It’s a post 85 property. You will be able to claim depreciation on the reno, and on the original building. A QS would be able to work out the construction cost of the original building. The QS would then use your receipts to add the reno costs to the Schedule.Of course, there would be many variations on the above. For example, the reno may have been only a partial reno and there may be some fixtures and fittings still in the property that were there when you bought the place. It sounds to me like you might be able to head straight to your accountant. Try and get the receipts in good order first i.e. don’t just lob with them in a shoebox. If you give me a call, I’ll tell you exactly how your accountant would like them presented. (That may save you money on accounting fees.)
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auHi Wayne,
Yep, you can claim depreciation. That luck just keeps coming…
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auWe’re gonna go through deppro anyway to get one, just wanted to find out if it’s worth saving $500+ to get the schedule from the owners, and whether we can even then use it.Why not ask Deppro if it’s worthwhile? We always look for the most cost effecient way to help our clients.
1. The building starts depreciating from when it was built. In your case, it’s going to depreciate at 2.5%pa.
2. The old Schedule would be useful because it would have the original cost of the building. having that cost will reduce the work for the QS – unless there are significant renovations.
3. The Assets (fixtures and fittings) can be valued at the date the you make them available to be let. It will essentially be a second hand replacement value. In the existing Schedule, most of these items will be written-off. You don’t want to inherit this Schedule. And you don’t want any mention of the Assets being written-off in the contract of sale.So the old Schedule is useful as reference, but it would be a good idea to get a new one. Getting the old Schedule would save you money on QS fees i.e. it shouldn’t cost $500.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auGlad we flushed you out, cv2me. I do feel it’s polite for business representatives to identify themselves by name, though.
You claim to be a quantity surveyor.I have never claimed to be a QS myself. I run a business. But I reckon I know the rules relating to depreciation better than most QSs. I do know, for example, that there is a glaring error in that post you made on Somersoft.
Could you please tell the forum what or any qualifications in quantity surveying you or any member of your organisation has; and which university the qualification is from. I would suggest none.Our head QS is Matthew Saunderson. He has a degree from Newcastle university – he’s a bit modest, but he got a few distinctions. Newcastle has a pretty good reputation. I’d say lots of the BMT guys would have gone through there. He is also a part owner of this business. And I doubt whether there is any QS in the country who has been into more investment properties than he has – I think he hit 3,000 last October.
We have 70 QSs around the country who carry out physical inspections of properties, cost capital works and value Assets. It’s ironic that given some QS firms use valuers to inspect properties for depreciation purposes that I persist with using QSs.
I would suggest that the majority of your postings are nothing more than touting for business and improving your google rank.My posts are answers to questions and contributions to discussions. Often they go beyond depreciation because I am a property investor myself. I learn alot from these forums and I contribute alot, too.
I have no idea what a ‘google rank’ is. But I’m all ears.Besides is business so slow that you have time to waste on these types of forums.Our business is quite busy, actually. Thanks for your concern, though. It’s also very well run, which affords me time to contribute to forums and expand my property knowledge. I don’t consider spending time on forums a ‘waste’.
Be careful, you could be spammed from the AIQS.Not sure what this means. Next time I talk to the head of the AIQS – as I do on occasion – I might ask him whether the AIQS sends out spam.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auHow spooky.
A very first post by a new member on PI at 11.23 on a Tuesday night talking up a company (and enclosing a link).
And a very first post by a new member on Somersoft at 11.08 on the same night talking up the same company.
The members and moderators of these sites take a dim view of companies anonymously touting for business. It’s rude and unprofessional.
But welcome to the forum!
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auYep, he has an office at Bella Vista.
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auModesty prevents me recommending us.
(But, gee, we’re good.)
As for the viability of getting a Schedule for just one year, it depends on how much depreciation is there and that is largely dictated by the age of the property and the quality of the fit out.
Give me a call if you’d like to discuss.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auYep, estimating the cost of the building is where particular expertise is required.
Give me a call and we’ll have a chat about the properties and work something out – there’s no charge for a chat obviously.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auAccording to the AIQS (Australian Institute of Quantity Surveyors) the ATO have also found that site and they’re not all that enamoured with it.
Most decent suppliers of Depreciation Schedules will make sure it’s worth commissioning a Schedule before going ahead with it.
Wayne, if your properties are in regional areas and they were built pre 85, there are a couple of things you can do.
1. Under the self assessment provisions, you can estimate the value of Assets/fixtures and fittings e.g. stove, carpet, air con. (What you cannot do is estimate the cost of any building work.) The value you ascribe to these Assets is essentially their written down second hand value i.e. what that stove is worth as a second hand item. You just take these values to your accountant, and they’ll know what to do with them.
2. We can give you a checklist, you can photograph the items, and we’ll value them and put them in a report. It’s quite acceptable to do this with Assets/fixtures and fittings. We charge $149 (tax deductible) for this. This option is perfect for older, regional properties.In a property with floor coverings, a couple of fans, some blinds, a stove etc, there could easily be $1,000+ in depreciation in the first year. You might as well claim it. And any depreciation you claim on the Assets doesn’t come into CGT calculations.
Scott
PS Thanks Simon and Barry.
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auIf it’s a mid range unit, the chattels will likely include:
carpet, blinds/curtains, exhaust/ceiling fans, stove/oven, cooktop, rangehood, dishwasher, intercom, HWS….?Their value will depend upon their age and condition. They may be worth around $6,000.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auThanks guys. I’ve been away for a week but I’m now back in the office. Happy to talk to anyone at any time – especially now we’re heading into our quiet season i.e. plenty of time for a chinwag. Most of the people here will be happy to chat about a property and work out the viability of getting a Schedule done. For pre 85 unimproved properties, we have a few low cost options.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auThe ATO Rental Properties Guide is also pretty good.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auHi Nathan,
That’s a pretty bizarre thing for an accountant to say. Lots of them still make up figures for depreciation (despite the ATO directives to them), but I have never heard of one who didn’t know abiut depreciation.
Do you still have the contract you had with the builder? If I can see it I’ll be able to tell pretty accurately what depreciation you’re entitled to.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auBilly, you’d have to use the UK depreciation rules because that’s where the property is. Should be loads of companies over there doing it.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auThanks for your prompt and helpful reply there Draconis. I have seen Kiyosaki’s book but I was under the impression it was more about telling people that education is not as much needed in todays day and age.Correct me if I am wrong
A ‘formal education’ perhaps, but successful investors are pretty clever and are always learning. They read books, go to seminars, hang around internet forum etc.
Let’s say I buy a nice little house in a rural area for $350,000. 4 bedrooms, 2 bathrooms, living room, kitchen, games room, garage and a nice backyard.Ok now let’s say I paying back my loan at $650/month (don’t know if that is unreasonable). Would I get some tenants who are paying $700/month so I pocket $50? Or do you go for a more wild number like say $850 or $1,000/month just so you have some money kept away for when the house is unnocupied?
The bank will dicate the rate at which you pay money back. Working in round figures, let’s say you borrow $350K at 7%. That’s going to be over $2,000 per month. Then there are rates, management fees, repairs/maintenance, insurance etc. As a rough rule of thumb, for a $350K purchase, you’re going to need about $700 per week in rent to break even.
There are hundreds of books out there to read. Some good, some bad. You might start with Steve’s books – you can order them from this site. Just remember the first book was written some years ago and the market has changed.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auRedfern has changed enormously in the last 10 years, and it will continue to change. It’s going to be a long time, though, before it’s safe to walk (or even drive) down some of the streets there. Some pockets are literally ‘no go’ zones. Some pockets are fine – I know two familes who live in Redfern and love it. I like it because it is still a bit edgy i.e. it hasn’t been sanitised. The differences between the good and dodgy parts of Redfern are quite dramatic. It’s one of these suburbs where you really have to check it out on the ground – just do it in daylight.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auHard to know where it will be good to buy in 3 years time, Christopher.
Not all baby boomers head out of town. And many of those who do come back – they miss their families, friends etc.
Many older people downsize i.e. sell the family home and move into something smaller. Townhouses are going to be become a sought after housing style.
Three years gives you plenty of time to save some money and do some reading. Go to every seminar you can, too. Just don’t sign up for anything.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auGee, I’d love to answer that question David, but I’d get myself into strife.
Rob, depreciation is just another outgoing, or cost of ownership. In that respect it’s really not much different from rates, interest payments, property management fees etc.
Depreciation is described as a ‘non cash deduction’. With rates etc, you pay money out during the year, and then claim it as a deduction. With depreciation, you locked in your entitlement to claom it when you bought the property. All you do every year and go and claim that depreciation.
A Tax Depreciation Schedule is a dicument that sets out how much depreciation you can go and claim every year.
Regarding Tools’ point, it’s only depreciation claimed on the building that comes into play when calculating capital gain. The Assets (fixtures and fittings) don’t count. And in many cases, there is more depreciation in the Assets than the building.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auDarryl,
To answer your initial question, painting is regarded as a building item. As such, it is depreciable at 2.5%pa.
For you to claim paining as a ‘expense’ i.e. a repair, you need to have been renting the place out for a while. The ATO don’t say how long, you just have to be sensible. If you’ve been renting a place out for, say, 9 months and you paint the entire inside of the house and claim it as a repair, your pushing it. If you were to claim repainting the hallway and a bedroom, you would be okay. Similarly, if you were to paint the outside of the place after 9 months and claim it as a repair, you’d be pretty game.In answer to this:
I presume that it preferable to transfer items to a Low Value Pool as soon as the Opening value drops to < $1000 due to the favourable rate?Once the written down value of an item drops below $1,000, yes it can go into the LVP and get depreciated at 37.5%
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auPhew.
Got the Sydney Morning Herald Spring Property Guide on Saturday and didn’t slit my wrists!
The Guide looks at price changes in Sydney and surrounds over the last 12 months.
The suburb where my Sydney IP is (Annandale) has gone up 3.6%. The average sale price went from $632K to $655K. The suburb where my PPOR is has gone down .05%. But it’s a big suburb and bank vals have shown my place going up in value.
Strangely, St Clair out west isn’t listed. It’s not a new suburb by any means, so that’s odd.
Erskine Park is the suburb immediately east of St Clair. Houses there have gone up 2.2%. Colyton is the suburb to the north. Houses there have gone down 0.2%. St Marys is north west. Houses there have dropped 4.3%. Based on the surrounding suburbs, St Clair hasn’t moved much.
There are suburbs in the outer west where average prices have gone up, but obviously many more where they have gone down.
The south western suburbs have faired worse, but there are still isolated suburbs where the prices have gone up.
In the inner west, there are a few suburbs with gains over 10%. The northern beaches and east are similar.
As a whole Sydney has obviously suffered, but I don’t look at markets as a whole because I don’t buy whole markets.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.au
