dear all,
i am really confused with the 2.5% depreciation you can claim for new buildings (after 1987). First I have heard that number needs to be spread out over 40 years. Other told me they have claimed $6,500 p/a on a house they build for 150 K. I don't get it ! Can anyone tell me what's right? I am on a 75K p/a salary and we are building our first IP (the slab should go down next week
The building costs are 157K per contract and the IP is in my name only. What can I claim as "building allowance" (can I do that through PAYG?) and what can I claim for depreciation of the fittings, construction etc….Thanks for your help….
ThomasHi Thomas
Capital Works Allowance, (i.e. Building Allowance) is based on the actual construction cost of the building calculated from the date of construction.
The building allowance is either 2.5% or 4% depending on the date of construction or type of building (residential, industrial, retail, commercial). Therefore a building has either a 40-year life (40 x 2.5% = 100%) or 25-year life (25 x 4% = 100%). After this time there is no more building allowance as it has been exhausted. (Capital works over and outside the above period can be claimed i.e. new deck, patio or extensions from the date of their construction).
For residential properties, Depreciation on the building is calculated at the rate of 2.5% per year if construction started after 16 September 1987, and 4.0% if construction started between 18 July 1985 and 15 September 1987.
Richard Taylor | Australia's leading private lender
thanks richard…that helps ! hope it does not get too confusing when come to tax times. are you guys all invest into
depreciation schedule or can I ask my tax agent ?
Thanks again
ThomasTax agent wont be much help you need a Quantity Surveyor.
Try someone like http://www.depro.com.au.
Richard Taylor | Australia's leading private lender
There is also the fixture and fittings of the building, such as dishwasher, carpet, kitchen cupboards etc.
These all have different depreciation "lives".For example; I think carpet has a "life" of 5 years, so the cost of the carpet is depreciated at 20% per year over the 5 years and so on.
Then there is a "pool" where a number of the items which are low cost, such as a kitchen flickmixer are all pooled together to make one amount and then depreciated.
As Terry said; contact a Quantity Surveyor who can do a Depreciation Schedule for you. The cost is around $500, is tax deductible and will pay for itself in the first financial year.
great advice guys…
thanks
thomasSorry people; I've done it again.
I said Terry when I meant Richard.
But they sound the same don't they? If you close one ear, whisper and mumble.
No Marc I am a lot better looking !!!!!
Richard Taylor | Australia's leading private lender
deppro are good,….
Qlds007 wrote:No Marc I am a lot better looking !!!!!I dispute that!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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