Do i prepare new depreciation schedule?

Morning all,

I got one IP in Seaford VIC, bought in 2009 and tenant moved out early this year..

Spent approx $25k recently to update kitchen, bathroom, carpet, painting, lightings. I got all the receipts.

Now it is tenanted (increased from $250 to $360 so quite chuffed).

what do i do with the improvement now? Im thinking its best to order new depreciation schedule to capture post reno condition?
Many thanks

 

Not only depreciation schedule but also scrapping values for what hasn't previously been claimed.

 

If you have a old QS report seek amendmnet to include the new works, scrapping etc. Some may also be considered repairs depending on some factors. eg rental income before and after and how long you have owned property etc. QS likely may guide what could be a repair and exclude from the report and then that part could be deductible. Or your tax adviser could first advise on those costs and then you provide QS with the changes. Works either way

 

I can't speak for others, but usually we suggest the latter. Some works may fall into a grey area where they could be seen as an improvement (and hence be depreciated) but could qualify as repair or maintenance, and it's not our domain to provide this sort of interpretive advice (unless it's directly related to depreciation). If you can claim something 100% as opposed to depreciating it, that's definitely the way to go.

 

In "simple" sceanarios the first approach may suffice but as you say - Sound advice is often the best start point. I am often assisting clients with this guidance prior to sending them to their QS. Then there is option 3. In some cases we can add a schedule to the tax return where for example there is no former QS report and the reno costs are apparent. We endlessly do this for appliances (div 40) and kitchens (div 43), new GFs etc.

Early enaggement with a QS can also benefit - eg They may ask for before and after images of the area involved eg kitchen cabinets. These items are part of the building and wont have a specific identifiable value in the report so determining the value to be written off and scrapped may be a problem. The QS may be able to reassess this for scrapping. Once demo'd that can become a problem otherwise.

 

Thank you all.
So to sum up, what i have on my records are :
- photos before and after
- video walk in after the reno is complete
- original depreciation schedule from 2009
- all receipts of the reno and improvement, all clearly itemised.
i have reached out to BMT via email and waiting for the quote reply.
so what do i do next? do i still need to get advise from tax accountant first before hitting QS for new depreciation report?

 

Probably. BMT have already explained this is their preferred approach.