Quantity Surveyor question

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TeacherK6
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@teacherk6
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Post Count: 164
February 21, 2004 - 9:38 am
Hey Tonyy
“Also, no one has mentioned the sting in the tail when you come to sell the property and the tax treatment of Div 40 & Div 42 deductions.”
Can you please expand on / explain what u mentioned above???
Thanx
Jason…
elves
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February 21, 2004 - 1:00 pm
you need to be careful when quoting ato rulings, because often there is a ruling that is contrary and then you are left confused. I say this because last week I went to my accoutant, and was discussing the other side of investments….we got onto investment verses trading, capital gains/capital losses…etc
what he said to me was, make sure you get a quantity surveyor! He said you may as well as the ATO will have deemd that you had claimed all the depreciation you were entitled to when you go to sell. He also said that he keesp copies of all the solicitors settlement and disbursements, because it is amazing just how much a problem the sale of an asset that is income producing can cost you…
keep good paper work!
But do the QS thing to claim max you can
Elves
redwing
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February 22, 2004 - 3:23 am
Originally posted by TeacherK6:
Hey Tonyy
“Also, no one has mentioned the sting in the tail when you come to sell the property and the tax treatment of Div 40 & Div 42 deductions.”
Can you please expand on / explain what u mentioned above???
Thanx
Jason…
Me too… just wondering regarding this statement ??
REDWING[]
“Money is a currency, like electricity and it requires momentum to make it Effective”
melbear
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February 23, 2004 - 12:04 pm
The ‘sting’ I believe is that any building depreciation you claim over the term of your ownership, is deducted from your cost base when selling, so you pay CGT on this cost.
Example.
Building cost $100K to build. So you can claim $2500 each year for 40 years.
You bought for $300K and held for 10 years. (I’ll ignore ALL other costs to show example more simply). In the 10 years, you have claimed $25000 in building depreciation.
Now when you sell for $600K, your gain would ‘normally’ be $600K – $300K = $300K right?
Not anymore! Your ‘new’ cost price = $300K – $25K (your depreciation claim) = $275K.
so your Cap Gain = $600K – $275K = $325K. Halve it etc., and pay your CGT.
Really, you’re now being taxed on $12500 extra at your marginal rate, but you had the refunds in your hand starting from as long ago as 10 years, so today’s $$$ that you pay back, are much smaller than the advantage that you recieved by claiming the depreciation anyway.
As has been mentioned previously, you could ‘not’ claim the depreciation to try to avoid this clawback, but the ATO will just treat it as if you claimed it anyway [], so you may as well claim it and use the $$ today.
Cheers
Mel
Derek
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February 23, 2004 - 12:11 pm
Originally posted by melbear:
The ‘sting’ I believe is that any building depreciation you claim over the term of your ownership, is deducted from your cost base when selling, so you pay CGT on this cost.
Cheers
Mel
That is the ‘depreciation sting’. Like Mel I prefer today’s $$ in today’s pocket – and the CGT bill can be offset at time of sale (if selling) be selling in a no/low income year and/or by selling your properties in a staggered fashion. One this year, and again the next year (or similar) and so on.
Derek
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depreciator
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March 25, 2004 - 12:30 am
There are many points raised in this thread. prices for Quantity Surveyors vary depending on where the property is. There’s a company I’ve used called Depreciator. They’ve done schedules for me all over the place. They only use Quantity Surveyors for inspections – some other companies don’t. And they have a money back guarantee.