Should I hire a Depreciator ?

Discussion in 'Accounting & Tax' started by Adam Harris, 12th Mar, 2021.

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  1. Adam Harris

    Adam Harris New Member

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    Hi,
    First time property investor. I need to know if it’s important for me to hire a depreciator or would the accountant know what to depreciate ? The property is 8 years old.
    Thanks for your help
     
  2. Paul@PAS

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

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    A quantity surveyor....An accountant cannot estimate the value in the building availabel to be depreciated. They can add a schedule for newly acquired assets from the time of acquisition onwards however. A 8 year old dwelling would have signifcant capital works deductions and be quite viable for getting a report. This will increase tax deductions.

    My rule is alwys get a QS report and only dont get one if the QS says its not worth the effort. Thats rare

    Some suggested QS firms : BMT, Washington Brown, Duotax.
     
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  3. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    I'll answer your question with a question, though I'm not the @Depreciator your subject line suggests: would you like thousands of dollars in tax deductions every year for up to the next thirty-two years, or longer if you renovate the property along the way?

    They may well know what to depreciate, but, as @Paul@PFI said, they probably won't legally be able to.
     
    Last edited: 12th Mar, 2021
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  4. Depreciator

    Depreciator Well-Known Member

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    'Depreciator' was such a good business name for a company that does depreciation schedules. I still recall the day I thought it up.

    Adam, your problem is that someone needs to work out what your building cost to build 8 years ago. Your accountant can't do that.
     
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  5. Synergy

    Synergy Well-Known Member

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    Can vouch for scott @ depreciator. Nothing but great things to say about them
     
  6. CK_Invest

    CK_Invest Well-Known Member

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    Assuming the property was built more than 50 years ago and the tenant paid for the entire fitout would it still make sense for a depreciation schedule?
     
  7. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    It's extremely rare for a commercial property of that age to a.) have no improvements owned by the building's owner, and b.) not to have plant and equipment (like fire safety equipment, air conditioners and more), which depreciate from settlement regardless of age, that are owned by the building's owner. It happens, but not a lot.
     
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  8. CK_Investing

    CK_Investing Member

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    Hi BMT, in my case of a strata commercial (+50 years old) where tenant owns the whole fitout (e.g. aircon, setup) whilst fire equipment paid / maintained via body corp then I guess it may not make much sense for me.

    Thanks
     
  9. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    It happens, though I maintain it's rare. I assume you probably don't have much common area on the strata plan, either.
     
  10. Paul@PAS

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

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    The "common area" issue is often missed by taxpayers. A commercial set of units will usually have carparking with capital works that may even be renewed each 20 years, loading dock areas, signage and fire hydrant systems and the like. The strata % means that you may also be considered to own X% of these areas.
     
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