Is a depreciation schedule worth it for an old house?

Bought an IP after the April depreciation changes came into affect. House built 1980.

It looks like the previous owners have done some upgrades on the property.
It has been suggested to do a “Deferred Depreciation” schedule.
I thought that the bathroom & kitchen would not need to be deferred as they are "building" and not "plant and equipment", but then was told that it doesn't look like there will be too much to claim in depreciation there and will need to look into it further a QS.

2 questions

1. I am wondering that, if there will be nothing or almost nothing in depreciation that can be claimed now, why not get the depreciation schedule done some years later when I am considering selling the house instead?

2. I thought that the depreciation that you get claim today has to be added onto your capital gain when you sell. So then what is the point of a deferred depreciation schedule if you just claim it and then pay it all back at the same time when you sell your property? I'm obvious mus-understanding something here.

Appreciate any infor.

 

What did the QS advise ? I see this endlessly. Their advice is what I would accept. A deferred depn schedule does not seem right. WRONG for a pre May 2017 property no matter what

Who is the QS ? If its not BMT, Depreciator of Washinton Brown you may be dealing with a minion

 

Added to CGT ? No. Absolutely wrong. Complete opposite.Deferred depn is a reduction to cost base and a Div43 add back always is 50% beneficial.

 

Get a second opinion from the 3 QS firms @Paul@PFI mentioned.

Email the existing report after you speak with them so they can run an expert eye over it and go from there.

 

Ask your QS ........You posted such expert view on the issue. I disagree 100%

 

Depreciator.
The problem is not them, it's me - I don't understand how it all works which is why I am asking.
Also it is a post April sale, not pre April (sorry, post May - thought it was April)

What is a Div43?

Are some type of depreciation benefits 'paid back', so to speak, once the property is sold and you lose some of the benefit that you had while you claimed it? I am sure I read something like that before.

If yes, how is deferred depreciation different?

 

I suspected that. Discuss true issue with a QS or a personal tax advisor. You dont seem to have an idea of the issues.

You read a post about depreciator and deferred deprecaition for post May 17 issues and have no idea at all

 

Isn't that why you pay the experts? Because they understand it, and then we also have somebody to blame if things aren't quite right?
Trust is earned through past exploits. Depreciator has been doing this a little while.

 

Yes it is definitely worth getting a schedule for old properties purchased after the budget. Why ?

Well discussed this today with @Depreciator they call it a deferred depreciation schedule which i quite like.

Anyway the benefit when you sell these are 3rd element costs which can be added to the cost base. Reduces your capital gain on sale in future.

 

Got this all cleared up, thanks to Depreciator's explanation.

In the off chance someone else is as confused as I was -

Two types of depreciation
- Building
- Plant and Equipment

For building, you can claim 2.5% per year for 40 years after build date, but when you sell, the amount you claim comes off your purchase price so you 'sort of' pay it back later as CGT, but there are still benefits to claiming it now, firstly when you sell you get the 25% CGT discount, and secondly money devalues over time.

For Plant and Equipment you don't have to 'pay it back' so to speak.​

One more question -

I'm aware this this a bit like asking "how long is a piece of string", but I'm curious about ballpark figures - if anyone develops/developed/bought a new property, mid-spec single story 3-4bd house at roughly 200-220k build cost, are you able to give some sort of ballpark figure for how much might be considered the Building cost and how much is Plant and Equipment cost used for depreciation? Just a rough number for the sake of my curiosity.

Also, if you spend 50,000 on a renovation on kitchen, bathroom, painting, carpeting, oven - but not major modification like extending the house - any chance to give some very general ballpark figure of what percent of this you might expect to be Building vs Plant and Equipment?

 

On a $200K build, the Assets might make up around 8% of the total.
Probably similar with a Reno that includes a kitchen. If the kitchen is not part of the Reno, the Asset percentage would drop.
Scott

 

Fulllylucky could probably do a free schedule for you

 

Why is that? Unusual for people to work for free. Not that I'd be complaining lol.

 

Really? So the kitchen is considered an asset (ie a 'removable' item)? Why is that? and why would it be different to the bathroom?

Thanks a lot for the reply also.

 

No, the kitchen is not an Asset, but it comes with Assets: oven, cooktop, rangehood, dishwasher. So a reno that includes a kitchen has a higher proportion of Assets and therefore more depreciation up front. A reno that is just a living area and a deck has fewer Assets and more building - 2.5%.

 

Ah yea makes sense. Thanks!