Hi there.
Great forums, first time writerI bought a IP in Melbourne's south east in my own name, settled in March 2010, now getting ready for doing my tax with a new accountant for the first time
Have educated my self reasonably well in depreciation and deductions but seeking relevant real time advice from informed others.
1.Is there any depreciation claimable this tax time, built in the early 1970s so before the key dates, ie, scrapping?
2. It is in the process of being substantailly renovated, hence not available for rent at this time however that is the intention soon
Because of this plain fact, I am of the opinion of not needing a quantity surveyor and a schedule at this time. However, once it is finished and being rented I can then do so, identifying deductions I can make next tax time.
Also, other costs incurred since settlement until now, project management fees, legal, building costs,etc are they rather added to my cost base and not claimable now as it is not available for rent.Any views appreciated
You are going to need a quantity surveyor sooner or later, so why not choose one, give him/her a call and ask if they think there is any point doing a schedule now, or best to wait till the works are finished…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi sportz43,
I'm in a similar situation, on my 2nd IP which I am in the process of purchasing I have been advised by a PM to get a Depreciation Schedule completed on the property in its current state after settlement before I renovate it even if I think the current fixtures/fittings arent worth anything due to being in an poor-average condition. She then told me just to keep all receipts of renovation costs and take it all to the accountant who will then depreciate items. I asked if I have to get a Quantity Surveyor out there again and she said it wont be necessary as they are normally used when the value of an item is not known.
Is this the best way to go?
Jac
Hi Jacqui_03
Congrats on getting your into your 2nd IP.
Yes, very similar situation. I think JacM advise is on the money. You can read and ask others and assume things but you may as well call a quantity surveyor in the area you need straight up and explain your situation. I understand most of the good ones will be able to tell you if its worth doing or not. I know I'm going to.Have you heard of Scrapping? sounds good for an old place
I don't want to rag to much on agents, but I definitely wouldn't take advice from a PM in relation to depreciation schedules. The advice they gave sounds a bit "she'll be right' but they are not the ones paying your bills
You would have to check on the renovation receipts/costs you mentioned with an accountant-they may be part of your cost base that only become relevant when/if you comes to selling and calculating CGT.
Cheers
sportz43 wrote:Hi there.
Great forums, first time writerI bought a IP in Melbourne's south east in my own name, settled in March 2010, now getting ready for doing my tax with a new accountant for the first time
Have educated my self reasonably well in depreciation and deductions but seeking relevant real time advice from informed others.
1.Is there any depreciation claimable this tax time, built in the early 1970s so before the key dates, ie, scrapping?
2. It is in the process of being substantailly renovated, hence not available for rent at this time however that is the intention soon
Because of this plain fact, I am of the opinion of not needing a quantity surveyor and a schedule at this time. However, once it is finished and being rented I can then do so, identifying deductions I can make next tax time.
Also, other costs incurred since settlement until now, project management fees, legal, building costs,etc are they rather added to my cost base and not claimable now as it is not available for rent.Any views appreciated
Has it been rented up until now? If not then NOTHING is deductable.
Send an Email to depreciator.com.au (look up their website. Scott will tell you what to do.
By the way- your lst question- if your "new" accountant doesn't know that you've chosen the wrong accountant.
How many properties does he/she own?Only get an accountant that is property savvy.
In last years tax your depreciation would only be 3 months on old fittings etc so not much. I would think better to get it done after the reno (but check with Scott). He will only do depreciation reports if you get your money back the first year.Everything has a scrap value, so it might be worth having a QS do a schedule for scrapping as well.
A good place to try in Melbourne is BMT, they will go over your property over the phone, ask a few questions and let you know if it is worthwhile. Following renno's, they will then be able to do the full depreciation schedule.Best of luck.
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