Should I get new depreciation report?

Hi,

When I first got my IP some years back, I decided to skim on cost of getting someone to visit and do a depreciation report. Instead, I opted for the cheaper option of sending some photos and details to a company for depreciation instead.

Now I feel that having someone to walk through and have a proper look to do a depreciation report should give a better estimate.

Question is, do you think it's worth getting a new depreciation report done?

 

You have given virtually no information at all about your situation so impossible to say.

If it is a property built in 1904 that you have owned for 40 years then the answer is probably no.

 

1970-1980 unit, kitchen looks to be redone in last 10 years and perhaps a new coat of paint then, Vinyl flooring, maybe 10 year old but had some parts replaced/fixed when I bought the unit about 5 years ago. Everything else looks original.

 

Why don't you call them and ask?
Most companies pretty much guarantee they'll save you more than the cost of the report

 

I probably haven't wrote my initial post clearly (multi tasking).I'm sure I can claim more than the cost of the report.Just wondering if a new report now (some 5 years after the cheapie report was done), would have given me a better depreciation schedule for the next X years compared to what my cheapie report is saying.

 

With the depreciation reports I had done the big deductions were in the first few years so if you have had the place for 5 years already maybe not worth it.

 

Reports are usually 40 years or so long long, so a 70s or 80s build is getting towards the end where depreciation amounts are low. However, a report from BMT and Washington Brown is around $650 so if you can claim back at least that much during tax time, you'll come out on top. The price of the report is also tax deductible given its an IP.

I had a new report done to replace a "free" one I got from a recent apartment build. The scenario is different to yours but it shows how getting a proper company to do it can pay off.

Link to the comparison posted in the Media section: Depreciation claimables - free report vs paid for

 

So it's an old flat with a possible kitchen replacement some time ago. Was that captured?
As somebody above said, most of the available depreciation in the Assets (appliances, HWS etc) will have been claimed in the last 5 years.

 

As others have said, by this stage it's probably not worth it to get a new one. You probably would have got better results five years back but it's probably of negligible benefit at this stage (as others have also said). The situation might be different if it were a post-1987 build, where the amount of difference in capital works allowance per year could cumulatively add up to be quite significant.

It doesn't quite work like that. A 1985 property (for example) doesn't have a forty-year lifespan (i.e., depreciation until 2025) because it was built before the 1987 cut-off date for Division 43 Capital Works Allowance.

This is a good example of what I was getting at above: there's close to a $1000 difference in yearly capital works allowance between these two reports, but it is a newer property and results would likely be different for one much older.

 

Thanks for all the great feedback. Lesson learnt, not going the cheapie way next time.

@Depreciator, the kitchen was captured by the report.

 

Devil's avocado here

Sometimes the cheapie photo only is better. Let's say the an ex owner renovated the kitchen by just putting new cupboard doors instead of a whole new kitchen but in photos looks like a new kitchen so the photo depreciation report assumes new kitchen put in year X and depreciated as such.

 

and the tenant walks in and thinks the photos misrepresent the condition....Ever been impressed by hotels that do that ?