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Depreciation fairy!

Discussion in 'Accounting & Tax' started by wombat777, 20th Jul, 2015.

  1. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,423
    Location:
    33°41'24.7"S 150°55'34.3"E
    Share your most recent visit by the depreciation fairy for a recently acquired IP.

    Property:
    Recently renovated (by former owner) 70's era 3-bedroom QLD highset with double garage, rumpus. I've had approx $10k of work completed after settlement. IP settled on 23/6.

    Depreciation:
    Depreciation will be $7.1k in year 1 ( diminishing value ) or $5.8k in year 1 ( low value pool ).

    Your estimate:
    This is way above the estimate I used for cashflow on this property ( I used $3k as an optimistic figure ). Helps that the property had kitchen / bathroom renos as well as numerous other improvements before I bought it.
     
  2. Davothegreat

    Davothegreat Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    253
    Location:
    Sydney
    Our most recent... Feb 2015 purchase, mid April settlement.

    Property:
    2x detached villas on a single Torrens title block. The site is approved as a dual occupancy. Front is 3/1/car space built circa 1950s, rear 2/1/car space built 1995. Front villa has a 90s kitchen and bathroom and had new flooring done by the vendor to sell (could still smell the new oil on the floorboards when we purchased and all bedrooms have brand new carpet).

    All I've done since purchase is replace the locks and install a water meter on the rear villa.

    Depreciation:
    I use the diminishing value method...

    First year $3.2k (is a very short year for plant and capital being mid April settlement, good year for low value pool)
    Second $7.7k
    Third $6.1k

    Aren't depreciation fairies wonderful!
     
  3. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    102
    Location:
    Australia
    Just curious, Davo: are they the figures for both properties/villas on the one title/report?
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,363
    Location:
    Sydney
    I do this day in and day out. You would be nucking futz NOT to get BMT or a QS on the phone.
     
  5. Davothegreat

    Davothegreat Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    253
    Location:
    Sydney
    Both villas are on the one report so my quoted figures are for the site rather than a specific villa.
     
  6. sammmeee

    sammmeee Well-Known Member

    Joined:
    16th Jul, 2015
    Posts:
    61
    Location:
    perth
    Agreed have used bmt and they have been awesome on all our pre 1970s properties.. Kinda feels like free money ( after the cost of the report)
     
  7. blackenator

    blackenator Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    96
    Location:
    sydney
    First property purchased brand new had some furniture and some tvs to go with the house when on rent almost knocked of my chair when I saw a nice 14k on deprecation
     
    sammmeee likes this.