I have a, dare i say it? a negatively geared property which was built in 1984 ( prior being allowed the full depreciation benefits)
Is it really worth the cost of contracting a QS at a cost of approx. $500 to compile a report? – not only on my property but generally on all properties whether they are old or new?
Your thoughts would be appreciated.
Hi Carly Boy,
Any property with a construction commencement date prior to 18th July 1985 does not qualify for building depreciation unless some structural renovations have been undertaken in the interim.
You have overlooked a key piece of information – the purchase date as this helps determine start up value for plant and equipment items.
Plant and equipment is loosely described as everything else not forming the fabric of the building. These have a start up value at time of purchase and depdning upon their age and value may be worth considerable tax claims under low pooling guidelines and the like.
I suggest a conversation with a qunatity surveyor (Scott AKA Depreciator) and he will be able to determined the economic advantages of a depreciation report or not.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
With alot of pre 85 properties, it’s hard to justify the cost of commissioning a Tax Depreciation Schedule. And we won’t do one unless there is sufficient benefit for a client. I’ve spoken to a few Forum members over the last week about how they can self assess the value of Depreciable Assets (fixtures and fittings) and claim depreciation without having to pay for a Schedule.
I’ll be in the office tomorrow – 1300 660033.
Scott
I’ve had depreciation schedules done for 3 pre-1985 build properties and all cases it’s definitely been worth it.I’ve easily had deductible depreciation well in excess of the cost of the schedule (about $450) so the report has been paid for in the first year, also the QS cost is deductible as well.
regards,
Rod.
Regarding depreciation on pre 85 properties.
Everything depends on the quantity and quality of assets inside the property.
If it’s a 2 bedroom, 1950s home with no carpet, no air con and and an original kitchen, it’s unlikely there will be sufficient depreciation to justify paying a QS.
We have a guarantee that if we can’t find more depreciation in the first full year than our fee, we’ll give the Schedule away free.
Having said that, if it’s a house like the one above we’ll recommend against doing a Schedule.
I’d say in the last few years we’ve only given away half a dozen Schedules.
You are allowed to self assess the value of assets in a property. As long as you don’t go crazy, you’ll be okay. It’s building cost that gets tricky and that’s where a QS (or other ‘appropriately qualified person’) is essential.
Give me a call and we’ll have a chat about your property. If you’ve got a reasonable accountant, there’s a chance I’ll be able to help you without you having to spend a cent.
Regards,
Scott – 1300 660033
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