Property in lockdown and need a depreciation schedule inspection? There are options….

By Tyron Hyde | 13 Aug 2021

The COVID-19 pandemic has created chaos for many property inspection businesses including Quantity Surveyors that prepare tax depreciation schedules.

Some tenants and owners simply don’t want strangers entering their homes. We can certainly understand that!

The good news is that due to changes in legislation, not all properties need to be or benefit from being inspected .

At Washington Brown, we research each property prior to quoting:

1. To ensure that proceeding with a depreciation report represents value/benefit for the owner.

2. To be able to advise clients on the most cost-effective approach to achieve the maximum depreciation specific to their property.

Not EVERY property needs to be inspected in order for the maximum claim to be achieved.

This USED to be the case – but the tax legislation recently changed and property investors can no longer claim depreciation on items like ovens or dishwashers that are not brand new.

So NOW you can only claim depreciation on the structure of the building like concrete and bricks for second hand properties.

If you BUY brand new items like carpet and blinds, you can still claim depreciation but it must be based upon the purchase price (not an estimate).

In the OLD days, Quantity Surveyors used to visit the property in order to value these items individually, the ATO put a stop to this in 2017.

Our Commitment to Property Investors Moving Forward:

Where we determine that an inspection is NOT required to ensure the maximum depreciation claim - we will not charge for this component. This results in a lower fee AND you’ll receive the report sooner.

Let Washington Brown work out the best depreciation plan for your property – click here for a depreciation schedule quote

Here are five reasons why SOME properties do not require an inspection:

  1. Extensive Database – In 40 years we have amassed an extensive database of construction costs for the majority of residential and commercial buildings around Australia.
  2. We have the costs – We are familiar with your building and as such, we already have the construction costs on file.
  3. Plant & Equipment no more – You have purchased a second-hand property so you cannot claim on the existing plant and equipment components.
  4. Online data – There is an abundance of detailed information and pictures of your specific property available online (both publicly and via subscription-based industry databases).
  5. You have the costs – Your property is a brand new build and you have access to the construction cost, plans and inclusions list.

Here are five reasons why SOME properties STILL NEED an inspection:

  1. Your property is unique – Your property is classed as High Spec/Luxury/Non-Standard and therefore not typical. An inspection will ensure the maximum deductions by ensuring all facets of your property are assessed and included.
  2. Non-residential – This means you can still claim the full benefits of depreciation including the Plant & Equipment (carpets, blinds, etc.)
  3. Renovated – Your property has been substantially renovated. There is insufficient information online and as such an inspection is necessary to maximise the depreciation.
  4. More information required  – We do not have access to sufficient information specific to your property. We, therefore, need to acquire this via an onsite assessment.
  5. Plant & Equipment – Your property qualifies to claim Plant & Equipment deductions, an inspection ensures no assets are missed, which means your deductions are maximised.

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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.

Read more Expert Advice articles by Tyron
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

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