All Topics / Legal & Accounting / Building Allowance 2.5% on apartment

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  • Profile photo of binscabbinscab
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    @binscab
    Join Date: 2010
    Post Count: 45
    May 25, 2010 - 7:29 am

    Hi guys

    Just wondering if there are any special rules for capital allowance on the building for an apartment?

    I don't own the whole apartment but rather just 1 unit in the building itself, am I still entitled to claim the 2.5%?

    Thanks in advance

    Scab

    Profile photo of Mr5o1Mr5o1
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    @mr5o1
    Join Date: 2010
    Post Count: 107
    May 25, 2010 - 8:13 am

    Hi Scab,

    In your specific situation, I’m not aware of any specific rules regarding capital works.

    What you might be referring to is the 4% rate for > 10 apartments which are used for “short term” accommodation (ITAA97 sec 43-145 )
    “short term” is a little ambiguous… because it does say “ie apartment buildings” which arent necessarily short term…

    ITAA97 sec 43-145 wrote:
    consisting of at least 10 apartments, units or flats which are for use mainly to provide short-term traveller accommodation (ie apartment buildings). The 4% rate is still available if the buildings also have facilities that are mainly for use in association with providing short-term traveller accommodation.

    Hope that helps..

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856
    May 25, 2010 - 9:08 am

    Engage a QS, they're cheap and will give you a more effective depreciation schedule.

    Profile photo of god_of_moneygod_of_money
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    @god_of_money
    Join Date: 2008
    Post Count: 970
    May 25, 2010 - 10:00 am

    Get Q/S to do it… I heard that they can claim more than builder report

    Profile photo of Mr5o1Mr5o1
    Participant
    @mr5o1
    Join Date: 2010
    Post Count: 107
    May 25, 2010 - 11:56 am

    a q/s will still give you 2.5% on the capital works.. a dodgy accountant might look at the total contract construction cost and apply 2.5% to the total rather than depreciating plant elements over a shorter time.

    Profile photo of binscabbinscab
    Participant
    @binscab
    Join Date: 2010
    Post Count: 45
    May 26, 2010 - 5:35 am

    I thoguth a Q/S only does the furniture and fittings + other Plant and equipment?

    I have asked if they can allocate some value to the furniture and fittings of the apartment per Steve McKnights book.

    Thanks for all your help guys!

    Profile photo of Neil RichardsonNeil Richardson
    Member
    @neil-richardson
    Join Date: 2010
    Post Count: 11
    June 1, 2010 - 12:20 am

    Scab

    To get the 4% eluded to in another post, you yourself must own 10 or more units in the complex. That won't apply to most people.

    You will get 2.5% on the construction costs, depending on age, plus depreciation on the plant items.

    Regards

    Profile photo of KateMelbKateMelb
    Member
    @katemelb
    Join Date: 2010
    Post Count: 71
    June 29, 2010 - 6:02 am

    Neil is spot on. A depreciation schedule will include any building allowance claimable on the property (depending on its age). Here's some more info on depreciation reports: http://blog.rentwise.com.au/index.php/2010/05/18/depreciation-reports-please-explain

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