Hi
Can someone tell me how much depreciation can be claimed withing a period of 5 years for a brand new 4 bedroom, 2 garage single level home. No extraordinary features, just standard like kitchen appliances, dishwasher, aircon etc.Thanks
Opportunity
employ a quantity surveyor.
Usually can claim 2.5% of building costs per year. Fittings like kitchens, carpets, hot water service, stove, ect will need to be looked up on tax web site to get effective life of item. If private use has occurred and diminishing depreciation was required for the item then you have to depreciate the item during the private use to get the current value to depreciate for rental use.
Each item has an effective life which the tax department determines .
If straight depreciation you divide the value of the item by the effective life to get a depreciation for each year.
see
http://www.ato.gov.au/content/downloads/IND00133190n19960608.pdf
ruling tr 2007/3
page 35 gives a list of some of the effective lives of items.Thanks so much for the reply Duckster!
Opportunity
Depends on the total cost – any clues?
Let's assume the house cost $140K in total.
Of that $140K, maybe $125K will be 'building'. At 2.5%pa that's going to be $3,125 pa for 40 years from when the place was built.
The remaining $15,000 is Assets (fixtures and fittings). These depreciate at different rates as Duckster said. You would possible claim a bit over $3,000 in depreciation on the Assets in the first year. Maybe $3,000 the following year. A bit less the year after…
So the total Year 1 claim might be $6,000+
Year 2 might be $5-6,000
Year 3 closer to $5,000.That's really rough. It all depends on what you spent and what level of fitout the place has.
Scott
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