Expert Advice with Tyron Hyde - 01/10/2015
Many, many moons ago all Quantity Surveyors interpreted the Tax Act differently when preparing depreciation reports. For example, some of us would say that kitchens were part of the building and others considered them to be Plant & Equipment (P&E).
Generally speaking it’s better to have an item considered P&E because you can claim it at an accelerated rate of depreciation.
The ATO saw the discrepancies and finally published a definitive list that we could all use.
Rant starts now: But they went too far. You see, they classified items such as kitchen cupboards, shower screens, vanity cupboards and many other items into the building allowance which means they have to be claimed over 40 years.
I don’t know about you - but I don’t want a shower surrounded by a 39 year-old shower screen, do you? Eeeww.
I see more & more properties that are 20 years old and have needed a serious makeover in order to get a tenant.
TIP: Don’t let the ATO get away with it - if you do remove things from your property consider a Scrapping Schedule.
Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost.
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.