IS MY PROPERTY TOO OLD TO DEPRECIATE?
The answer to this question is almost universally No. All properties that commenced construction after 16 September 1987 qualify for both depreciation on items known as Plant & Equipment (ovens, cooktops, curtains, air-conditioners, etc) as well as depreciation on the structure of the building itself. For properties that commenced construction before this date the plant is still depreciable, irrespective of age.
In 20 years of preparing Tax Depreciation Reports we have only seen two or three properties where we have advised the client not to proceed.
NEW OR OLD, WHICH IS BEST?
In terms of actual available depreciation deductions, new is better but older properties still provide significant deductions especially if they have been renovated (see below).
I HAVE COMPLETED A RENOVATION ON MY PROPERTY. WHAT CAN I CLAIM?
Renovations, apart from making your property seem almost new again, also attract their share of depreciation deductions. If you complete a renovation on your existing investment property, you can claim the renovation cost as well as a scrapping cost via a scrapping report.
A scrapping report details all those items to be demolished that have a residual depreciable cost. These costs can be claimed as an immediate deduction in the financial year that they are scrapped. Be sure to contact the team at Summit Quantity Surveyors before starting the renovation so we can prepare a scrapping report for you.
CAN MY ACCOUNTANT PREPARE A TAX DEPRECIATION REPORT FOR ME?
No. Accountants, Solicitors, Real Estate Agents and Valuers are not permitted to prepare Tax Deprecation reports. Taxation Ruling TR97/25 notes that Quantity Surveyors are one of a very few suitably qualified professionals that can prepare these reports.
HOW DO I ORDER A REPORT?
This is the easy part. Head to our Order Form page and fill out the questionnaire. We will contact you, send you a property information sheet for you to complete and return and then we do the rest.
We then organise with yourself or your property manager a suitable time to inspect your property, complete on on-site inspection and measure and then send you the completed report within three working days.
HOW MUCH WILL A TAX DEPRECIATION REPORT COST ME?
The following represents our fee structure as at 1 January 2014:
• Low-rise residential properties $330 to $550
• High-rise residential properties $440 to $660
• Renovation Scrapping Report $330 to $440