BMT compared to other tax depreciation companies

Hi Shazz
Wondering whether these firms that you compared BMT to, were one man bands or large firms?
Because I have found the opposite, when you find a firm that has an all round QS expertise, they will often beat them quite considerably.

 

It was a like for like comparison.

 

Preliminary estimates before engaging for a fee
Amended reports for scrapped items and changes
Scrapping guidance
Telephone support
Real-world attendance to do the report and not a desktop report
Two reports x 50% each for no different cost (ask them why)
BMT have a reasonable sized team and it costs money to have a quality business that is national.
......just some of the benefits I see with the larger QS firms.

I believe a report from $550 up to $800 is reasonable especially when the expected assets involved and the potential deduction of $13K- $20K a year initially. You dont want shortcuts that cost deductions through shortcut efforts.

I see some terrible "cheapie" reports. Some last as short as five years and I'm expected to enter it all into software. I see accountants who do this who consoloidate assets and its a terrible practice. Some dont even tell you what year is what and report "year one, two etc"... Some ignore the division 40 "used asset" issue. Some are just badly prepared with missing detail eg cost of construction seems real low. Clients do a reno and I mention scrapping the garage outside and they wont help. Saw one a few month back without TPB registration. I told client to get a refund and a new report - It had higher deductions. One only showed prime cost.

I have had clients buy apartments where a major QS has done the builder construction lender preliminaries. They often then charge less for the report and need info on unit interior fitout only. One client had a full BMT report for far less than usual cost due to this.

 

Hi Shazz
I understand that you compared the reports on the same property.
My question was more about the other QS.
Were they a one man band or another large company like Washington Brown or Deppro?

 

Yes, that’s correct. Large QS firms.
Otherwise the comparison would not be fair.

 

BMT have a huge team of BDM's, inspectors and report generators, which would cost a lot to feed, hence their high-ish fee for a one off report.
Is it important to you, that an actual Quantity Surveyor prepares the report?

 

I don't think there's a difference. But you are treated is a big difference, and I was treated like I was welcome and they wanted my business.

How would I know without spending 3 times as much to get 3 or more reports?
I do however trust the judgement of my accountant who is very experienced in RE and has many very wealthy builder clients.

The amount a person get back from depreciation depends on the tax bracket. Thus "60k...4k" have no meaning without context.
Me being PistonBroke puts me in a low tax bracket, so spending too much time and expense on a sub 200k IP makes no sense.
As a yardstick why not use percentage of purchase price?
What percentage of the purchase price of houses and units is your average deductions?
A ratio is much more indicative of good value.
In my case 18.55% of purchase price was depreciated in the first 5 yrs on a 14 yo building.

I was very happy with the service. simple, fast, easy and all done with one phone call. Cost $330.
I don't know as I'm not willing to get 3 dep schedules done.
The one I'm looking at was done 2005, not sure who actually did it though it's signed by Mark Wilkins.

 

I got 2 done by Deprecator which were cheaper and one done by BMT for 3 very similiar builds. The BMT was $650 my accountant said not a huge difference but BMTwas superior, it claimed more on some outside stuff landscaping or something. I dont think you would be worse off using BMT

 

The yardstick approach seems like a good way to look at it, so if you put the example property in as a percentage like you have, the other QS firms report was 15.9% of the purchase price depreciated in the first 5 years vs the BMT report 10.66%. Bearing in mind this was a brand new property and cost more than $200K.

 

All of my clients use BMT . They provide a quality service and I’m not going to ask my clients to pay for 3 different services in order to determine whether there is an advantage or disadvantage using BMT . I just want my clients using a reputable company who provide thorough documents that they can use for up to 40 years.

 

That a pretty big difference and seems at odds with other poster's experience.
I may be doing a CIP build soon with a much bigger cost, and in that case I probably will get at least two schedules done.

The person who signed my report left BMT and started his own QS business.
Maybe it was a staff issue.

Sometimes you need a bit more than MacDs. Others a burger to go is just fine.
And I say that cause they have no names of people that work there on their website.

 

I have seen several client examples of obtaining two QS reports. In each case the original QS firm was the same. I have copies but wont post them so as not to disparage reputation and it is client property. In most case the clients then had BMT provide second reports. One chose Duo Tax. In each case the deductions were notably different as the original report didnt include some assets (missed) and under valued the construction cost.

If constructing I see no reason why you would need two reports. Actual costs are known. Its like getting your car polished at two places.

 

Agree with the last comment, you don't need to get two reports, especially when actual construction costs are known . As Paul@PFI stated earlier, a good tax depreciation QS can provide you with an estimate of depreciation, which would be based on your particular property and your purchase price.
Using depreciation calculators that some companies have on their websites, is not a good guide either, as they are very generic and may not compare to the actual property you have bought or are buying. And if you have time, read the disclaimer on these depreciation calculators!

 

Outside 'hard landscaping' is always included in our Dep Schedules as it should be. It does not show up as a separate item, just as fences, driveways etc do not show up as separate items. These things are all included in the Cap Works figure.
Scott

 

No disagreement here. I'm going to go with it being the "or something" rather than any landscaping.

 

Why not list it separately as "structural improvements", as the eligible date for these items is different to the building.
If you had it listed under this category there wouldn't be any doubt as to whether it had been claimed or not.

 

Sigh.

If the work was done at a different time to the main building, it would be listed as an improvement.

 

Many QS's show each improvement by cost and date in a summary page which helps guide whether it was included previously. eg 2011 - Kitchen $14,300, 2016 Bathroom $8,890 etc which helps when it comes to sale time to ensure the costbase includes the cost of improvements for CGT purposes. It would concern me that we could reduce the costbase for the deductions claimed and make sure then that the improvement costs are also added in.

I know BMT include that detail (I check when we get a updated report) and they will even summarise the basis of the information sources used to prepare the report and show the date the property eas attended for inspection. For others we file "old reports" and label the folder for the present eg QS Rpt Mar20 after bath reno and so on.

I have never had a issue. At times we also note a report may be a 50% report, (ie x 2) or some other basis if its not a single stand alone report. This is more for our own purposes as the cover of each QS reports tends to indicate this. We dont want only 50% included in the tax return.

 

This post is about "BMT compared to other tax depreciation companies". Ruby Tuesday basically said your report was inferior to the BMT report.
Separating the structural improvements out, is what I have seen done in quite a few other QS company's reports and could be a point of difference.

 

Yep. We separate them.