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Depreciation schedules- Are they all the same?

Discussion in 'Accounting & Tax' started by Daniel007, 16th Nov, 2015.

  1. Daniel007

    Daniel007 Well-Known Member

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    Hey everyone,

    I'm looking to do get a quantity surveyor out to do a depreciation report, I'm curious to know if there is a massive difference between the available options?

    We've got quotes from Washington Brown and BMT, with BMT coming in at just over $200 more. Is it worth spending the extra because i'm not sure if there will be any difference in the final outcome?

    Also interested to hear any experiences with the mentioned companies, i know BMT is very good but i haven't heard as much from Washington Brown.

    Cheers
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes there can be differences in values, ages estimated and even missed items.
     
  3. Xenia

    Xenia Adelaide Property Manager Business Member

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    True - but paying more does not ensure a better service. The bigger more expensive companies can still use a junior to do the schedule who can still miss things and get things wrong.

    I would look for a senior person (not company) with a good track record.
     
    MTR likes this.
  4. rhinsor

    rhinsor Well-Known Member

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    So can you pay for 2 or 3 depreciation schedules, choose the one with the best dedications and claim the cost of all schedules on tax?
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Get a quote from Depreciator too.
     
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  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    The highest one isn't the best - perhaps they wrongly guessed age and value of things too.

    Best bet is just to go to a reputable company like @Depreciator and be done with it.
     
    larrylarry likes this.
  7. larrylarry

    larrylarry Well-Known Member

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    Mine is being looked at by @Depreciator atm. Yeeha!
     
  8. Mumbai

    Mumbai Well-Known Member

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    Yes, everyone is the same. But @Depreciator is cooler ;)
    In all seriousness, i always get great service from them.
     
  9. Daniel007

    Daniel007 Well-Known Member

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    Thanks guys
     
  10. JacM

    JacM VIC Buyer's Agent Business Member

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    The pricing difference can often be related to how far the depreciation company's rep has to drive to get to the property. One company might have someone closer and thus what they have to pay the person in travel fees is less.
     
  11. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I see this week that Brad Beer was out and about doing personal QS report data gathering on The Block...ipad pics, notes and obviously cost details from Lang Constructions etc.

    That raises a very pertinent point. The value of the property and its deductions have no weight on the cost of a QS report. All the included plant and equipment that normally doesn't come with a home eg appliances, heaters, furnishings etc definitely adds to the value of deductions. Where a $300K weatherboard in Brisbane with $1k a year in deductions may cost same for the report....

    Here are some details on the deductions

    $60K in year 1 tax deductions. $1.6m over 40 years. For $770.. Even if BMT charged more for the complexity....A bargain.
     
    BMT Tax Depreciation likes this.
  12. joel

    joel Well-Known Member

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    Washington Brown did mine, they were good, and cheap. I have a referral code if anyone wants a discount.

    (I'm hoping I'm allowed to post this)
     
  13. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    There are probably 5-8 really well known one's. BMT, Depro, Depreciator, WB amongst them.

    The larger firms offer a far more polished product and are usually diligent and assist with scrapping, modified reports, splitting for spouses to increase deductions, adding reno's later etc. Some firms are QS / engineering consultants first and offer schedules as an aside. The ones above are schedules first work for all the largest developers (A bank requirement !!) to validate construction cost estimates and to guide marketing etc. The ability to call and get after sales support should not be underestimated.

    Some of the cheap small ones are very outdated software etc. I still see some cheapies that show 10 years of deductions then they just stop. Useless in my opinion. I saw one last year that didnt have ATO Tax Practitioner registration too. (Client got a refund)
     
  14. kevilian

    kevilian Active Member

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    I recently got quote for a depreciation report for the next IP from BMT, washingtonBrown and Depreciator, as the price is BMT > washingtonBrown>= Depreciator. I used BMT before so I tried to ask BMT to price match the others but they refused, so I go with depreciator this time.
    Hope they can be as good as BMT!
    will update when it's done next month...
     
  15. Nick Valsamis

    Nick Valsamis Well-Known Member

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    Each person that does the report is different and can even forget items, so unless you get the same property done by all 3 of them, then it's hard to tell which one is will be the best to use.
     
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  16. Redwood

    Redwood Well-Known Member

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    A QS can prepare the report, but no one will no the property better than you so please ensure it is complete to maximise your deduction and ensure the tax accountant you use claims the right deduction.

    Cheers Ivan
     
  17. kierank

    kierank Well-Known Member

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    This is so true.

    We have two properties, both in similar suburbs in Brisbane, bought a year apart, both are 4 Bed, 2 Bath, DLUG on roughly the same land size, both single level brick veneer construction on a concrete slab, both have roughly the same internal floor size (138m2 vs 145m2), the purchase price difference was $10,000, their construction dates were a year apart but the Building Allowance (Depreciation Report done by two different companies) is $2,000 per year more for one than the other ($4,699 vs $2,699). This didn’t come to light until some years after we bought when I was doing some analysis on the two IP’s.

    I know the Building Allowance for each IP is different because the Estimated Construction Cost for each property is different ($163,000 vs $108,000) but I could never work out why one property was estimated to cost $55,000 or 51% more to construct than the other as, to us, the two properties are very, very similar and were built a year apart.

    Ever since (5 more properties), I have always used the company that calculated the higher Building Allowance because a dollar of depreciation today is worth a lot more than a dollar of depreciation in 10, 20, … years time.
     
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  18. S.T

    S.T Well-Known Member

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    Good thing I like about Depreciator is the free updates to schedules when you do renovation, or add new appliances etc. some of the other companies don't offer that.
     
  19. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    some can also be extremely difficult to analyse and lead to errors if doing your own returns.

    saw a schedule last week that had year one, year two, year three etc. no years up the top like most schedules. had to find the date when first available for rent and then work out the relevant year. not difficult just a bit of pain.
     
  20. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Yep Mike. Also other issues:
    - Ends after 10, 15 etc years
    - Years aren't actually shown. Just Year one, two etc....Why cant they use real numbers !
    - No summary / breakdown of the CGT elements (ie its 100% guesswork)
    - No summary of annual deductions
    - Helpful = Start date when first available for rent or acquired