Should I be getting Depreciation?

Discussion in 'Accounting & Tax' started by bonanzawealth, 5th Aug, 2015.

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  1. bonanzawealth

    bonanzawealth Well-Known Member

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    I'm buying brand new home as PPR but I'm thinking of turning it into IP in about 5 years time. When should I be getting the depreciation done? Is it as soon as the house is completed or when it's time to turn it into IP?

    How much does it cost normally?

    Much appreciated!
     
    bonanzawealth, 5th Aug, 2015
    #1
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    When its about to become a IP. Get a quote at that time or check the online info at BMT or Depreciators website. You will do improvements in the next XX years. Keep records of your costs in that time and the QS will use it.
     
    Paul@PAS, 5th Aug, 2015
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  3. bonanzawealth

    bonanzawealth Well-Known Member

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    interesting... didn't know I should keep records of the improvement. Thanks Paul@FPI
     
    bonanzawealth, 5th Aug, 2015
    #3
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Thats OK Bonazanda
     
    Paul@PAS, 5th Aug, 2015
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  5. Chilliblue

    Chilliblue Well-Known Member

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    If you are purchasing new, try to get a depreciation schedule from the builder
     
    Chilliblue, 6th Aug, 2015
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  6. Raydar

    Raydar Well-Known Member

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    Because actual figures are better than an estimate?
     
    Raydar, 6th Aug, 2015
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  7. Chilliblue

    Chilliblue Well-Known Member

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    Because many builders can you give this information for free and it can used by the future QS which saves time and money
     
    Chilliblue, 6th Aug, 2015
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  8. Depreciator

    Depreciator Well-Known Member

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    Yep. Good advice. And as others have said, no point at all doing a Dep Schedule till just before you move out.

    Scott
     
    Depreciator, 6th Aug, 2015
    #8
  9. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Usually it's the opposite way around! A decent QS not only provides an estimate but a maximised estimate: essentially, the highest reasonable value that the ATO will allow. A builder's depreciation schedule will use actual figures.

    The unfortunate part is that if you have the build cost or contract price paid to the builder, that's what needs to be used by a QS anyway. It leaves less room to maximise capital works deductions but there's still some room to move with fixtures and fittings (unless, of course, there's a complete breakdown of these!). Plus, tax rules like Low Value Pooling can be used to push more deductions up front, if that's what you're after.
     
    BMT Tax Depreciation, 6th Aug, 2015
    #9