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Is getting a depreciation schedule for a 100yo property worth it?

Discussion in 'Accounting & Tax' started by Adele, 10th Mar, 2016.

  1. Adele

    Adele Well-Known Member

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    Hi All,

    I was wondering if anybody has any experience with getting a QS report for a 100ish yo property. I am considering getting one done as it has recently been repaired due to damage (internal damage, whole roof replacement). Will I be better off handing the invoices to my accountant or should I try and see if there are more things I can claim? The building is a well kept double-storey 240m store.
     
  2. jaybean

    jaybean Well-Known Member

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    Yes I still managed to get some great deductions. Age was maybe 100-115 years. Granted it had been renovated about 15 years ago so I think that made a big difference but I'm no expert in these things.
     
    Last edited: 10th Mar, 2016
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  3. Big Daddy

    Big Daddy Well-Known Member

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    If recently renovated (past 10 to 15 years) then yes. Else no,as everything has been depreciated to cost base of zero
     
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  4. Depreciator

    Depreciator Moderator Staff Member

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    So Adele, you have the costs of the recent work - roof replacement etc. If it's a recent purchase, there will still be depreciation in the appliances, HWS, floor coverings etc. Were there any other recent renos done by a previous owner?
    It's worth sending some photos to a QS and asking their opinion on whether it's worthwhile getting them involved. People send us photos every day.
    Scott
     
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  5. JacM

    JacM VIC Buyer's Agent Business Member

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    You can even depreciate rewiring. Chat to the depreciator folks on the phone and they will give you an idea of how much they can depreciate
     
  6. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Simply giving your tax agent these invoices will give you an incomplete claim. There's a huge variety of things you can claim at an old property regardless of age. All fixtures and fittings restart their lifespans when a property changes hands and any previous owners' renovations can be valued.

    Unfortunately, Big Daddy is off the mark here for the reason above (and I hope hasn't been missing out on tax deductions because of it). Beware: there's a lot of faulty information and misconceptions about depreciation floating about and some of it even comes from tax agents.

    Essentially, what Depreciator said: seek the opinion of a QS firm that guarantees its work. If it's a recent purchase (say, in the last 5 or so years) then you will get a positive result 99% of the time. Photos or a link to a listing will simply help a QS provide an estimate for your (and your tax agent's) peace of mind before you proceed.

    I repeat: did you buy a property within the last 5-7 years? Then it is worth contacting a QS, regardless of the property's age.
     
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  7. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    There is only one answer to this frequent question.

    You only don't bother with a QS report when a QS confirms its not cost effective to proceed. Most of the major firms offer a fee guarantee of some form which adjusts the cost based on outcomes. I must say its rare to find zero deductions. Even a dump ready for demo after tenancy may have some. A client of mine recently obtained a scrapping report of the day of demo that gave $6K of deductions
     
  8. Adele

    Adele Well-Known Member

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    Thanks everyone,

    I just purchased this property last year, but it didn't look like the previous owners had done much renovation in recent years as it was owner occupied.
    The most recent renovation done are by the tenant fit out along with repairs and the roof I've replaced.
    Learning new things everyday:) Was thinking to do the QS at changeover but decided not to as I thought there wouldn't have been much value seeing as it is really old
     
  9. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    If you'd like to message me the address I can do some research and provide an estimate of what you'd be looking at.
     
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  10. JacM

    JacM VIC Buyer's Agent Business Member

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    I believe you can submit an amendment to tax returns up to 2yrs old so that you can back-claim your depreciation. Check with your accountant.
     
  11. Adele

    Adele Well-Known Member

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    Thank you,

    I will certainly get a couple quotes. I have had a report done for a brand new property last year through @Depreciator . It would be interesting to see how much this old one will be in comparison. :) Hopefully it can lessen the sting of the cost of repairs so far.
     
  12. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Definitely. I have a 1920's house in Bendigo that has had numerous extensions and improvements over the years, and Depreciator's QS found about 3k of depreciation pa on it
     
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  13. Big Daddy

    Big Daddy Well-Known Member

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    Thanks for correcting me Chris
    I had a similar 100 year old property untouched for 25 years and wanted a scrapping report for demo. I asked one of the respected QS guys here and was told there was nothing to depreciate.
     
  14. Depreciator

    Depreciator Moderator Staff Member

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    If there are structural renos done after Sept 87, they have a written down value when disposed of.
    Assets (appliances, carpet etc) have a value when disposed of. But if the property has been owned for some years, there may be no value left now in the Assets.
    Scott
     
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  15. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Yes, as per our private messages and Depreciator's comment above, it's not the building age that's the only factor here, it's also the length of ownership and the lack of substantial upgrades to the property.
     
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  16. S1mon

    S1mon Well-Known Member

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    err really?

     
  17. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Yes. Someone told you otherwise?
     
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  18. hudbry

    hudbry Active Member

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    Hi all,
    Since my question is fairly similar, but with a slight difference, I thought I'd ask your thoughts.
    I've got an older property, not 100 years old, more 50s -60s build.
    It's one block, but 4 units, non Strata divided. 2 two bed and 2 one bed.
    I've been told by one quantity surveyor that there wouldn't be much depreciation left in the building, but more in the assets.

    My question is: should I do 4 separate depreciation schedules on the 4 units or just the one for them all.
    Obviously doing the one is cheaper, but what are the advantages of doing 4 separate ones? Am I missing something? If 2 hot water systems are replaced in two units, and all 4 bathrooms are renovated at some point, where does that leave me?

    Many thanks for your guidance.
     
  19. Adele

    Adele Well-Known Member

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    @hudbry

    Might be worthwhile to ask @Depreciator about this. My property turned out to have more depreciable assets than I thought.
     
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  20. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You should do 4 separate ones as each unit will be unique.
     
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