Depreciate a second building

Just to preface this question. I know it is quite technically complex and I am considering seeking a private ruling from the ATO, but want to see if anyone has a similar experience.

A family member recently bought an off the plan apartment. The apartment building was a fit-out of an existing structure (think warehouse conversion), and therefore parking was unable to be provisioned within the same building. The parking was provided at another apartment block next door. In short terms, the same developer owned/developed both sites, and knowing they could not provide parking for the fit-out, they over-provisioned parking in the new build adjoining development on the agreement that some parking would be allotted for the adjacent building being converted. This is fully documented in the planning documents submitted to the government.

This has resulted in some unforeseen consequences (at least from my perspective). My family member receives strata and rates for both buildings. Needless to say, paying thousands a year in strata and rate levies for the benefit of a parking spot is not very cost-effective, and frankly leaking money.

My question relates to depreciation. Being a brand new apartment, there are substantial depreciation allowances for the dwelling, however, the parking space is in a different building. Does anybody have experience being able to depreciate assets in a second building that contributes to the primary income-producing asset? If my relative was able to depreciate all the assets in the second building too (lobby, lifts, garage door, etc), this would be quite beneficial as the relative is a top marginal tax bracket earner. Indeed, over the long term, arguably the depreciation could be worth more than the parking space.

 

If the title comprises two distinct areas (perhaps in different buildings) then each can be assessed for Div 40 and Div 43 by a quantity surveyor. This may include share of the common areas in each. A QS would likely prepare two reports.

 

Yes seems pretty straight forward to me

 

Confirmed.

 

Thanks all, will take your comments on board.