Hi everyone
I have received a request from our neighbour as they are wanting to replace the existing wooden paling boundary fence with a colourbond fence. Since the wooden fence is looking rather tired, I am happy to proceed but from an investing (and neighbour relations) point of view, I would appreciate any comments from seasoned campaigners!
The boundary fence that requires replacement is mainly with the neighbour in question, however also stretches a little way into the next door neighbour's property (ie our back fence that is the issue here stretches across 2 properties along the back). From the quote, I assume that the neighbour has only requested for their section to be replaced. Since I will require the whole fence replaced, I assume I would request the neighbour wanting the fence replaced to contact the other neighbour to get their approval to have the fence in their property replaced and pay for half of that section (I will agree to pay for half of the whole fence that stretches across our boundary).
Prior to proceeding, would you request written agreement from the 3 parties involved (us, neighbour wanting the fence replaced and the other neighbour whose fenceline we also share across the back)?? While I would be happy to meet to discuss across the three parties and get everything moving, since this is an interstate property, I can't see myself going there anytime soon. I haven't received any complaints from our tenants regarding the fence yet.
From an investing/tax point, how would this change be handled? Since I purchased the property this FY, I am yet to have the property quantity surveyed for depreciation, so if this goes ahead, I will have it surveyed after the fence is replaced (I really can't see any value in scrapping an old wooden fence of 12m length??). Anything else from a tax point of view that I need to consider in changing from a wooden to colourbond fence?
Many thanks for your comments,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Yes def get it all in writing.
The fence would probably be a capital improvement and depreciated.
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
Many thanks Terry,
You jolted my memory about capital improvements. Could you please expand on the capital improvement and any implications from a tax point of view?
The neighbour is organising the fence replacement so the quote (and receipt) will be in their name. Since I will be keeping the invoice/receipt to add to the property costs (even though the total cost is $800-900 and my cost around $300), wouldn't I need the invoice in my name??
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Colorbond fencing is a bit tacky in my view however they are far more durable than palings. Make sure you also get a few quotes.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
The cost of fences can vary quite a bit so a few quotes is definitely the way to go.
Like Terry said – get it all documented and have the company invoice all parties separately so you're not the one paying the bill and then looking for reimbursement from the neighbors.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
With regards to the rest of your fence, this is your/other neighbour's fence so YOU will need to get the quotes & contact the other adjoining neighbour – I would suggest contacting the same 3 fencers who have provided the quotes (since they have been to site and it would be cheaper to use one of these guys than another contractor.
ChrisA1 wrote:Many thanks Terry,You jolted my memory about capital improvements. Could you please expand on the capital improvement and any implications from a tax point of view?
The neighbour is organising the fence replacement so the quote (and receipt) will be in their name. Since I will be keeping the invoice/receipt to add to the property costs (even though the total cost is $800-900 and my cost around $300), wouldn't I need the invoice in my name??
Items of a capital nature could only be depreciated rather than claimed outright. that is a portion of the cost claimed each year for x years.
You should only hand over money on the production of a tax invoice – from the person you pay.
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
Jamie M wrote:have the company invoice all parties separatelyJamie
Absolutely.
Fencing was how I started my contracting career many moons ago. Definitely not a problem and quite common for multi party fences. A complete refencing job can involve 7+ parties.
TheFinanceShop wrote:Colorbond fencing …………they are far more durable than palings.Shahin
Wouldn't say that. Paling (pine) fencing is the standard in NZ. MY old man's fences are still good today and they're 50yrs old.
Many thanks everyone for the comments, plenty to consider.
Appreciate your comments Scott, since my neighbour is the one pushing for the fence (our tenants haven't complained/commented about it), I will get them to do the legwork and paper signing, if the deal falls over then I know I can come back to it later as this is the second time they have approached us about it in 6 months.
As the comments have suggested, I need all parties to provide written agreement and I appreciate the comments about invoicing separately so no-one is left holding the balance (I was going to leave the payment to the tradie with the neighbour wanting the fence changed so they can chase up as needed).
If invoiced separately, I would only be claiming the depreciation on the $300 or so invoiced to me (or on the otherhand if the invoice was addressed to the neighbour, then I wouldn't be able to claim at all??)
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
To take a tangent, I agree with TheFinanceShop's post above, about palings being more appealing than colourbond. That said; which is better from investment property standpoint?
Let's assume on ChrisA1's property colourbond is $900, what would be cost of the palings?
As I understand it, should expect palings to last 20 years. How long does the colourbond go?
We just got quotes for ours. It was quite confusing. We had back neighbour, side neighbour and internal to section off granny flat. We just got him to quote the 3 bits separately.
The total cost varied by $1000 with 3 different companies.
I like colourbond. We had it at our old house. Put it in 15 years ago and it still looks like new. But it's a personal choice. The problem can be deciding on colour though if different neighbours.
Possibly depends on area. I live in old area, my PPOR was built in 1860, with later extensions. In my area everyone uses palings and they suit the area. In a new estate or with new 'modern' houses, fair enough, colourbond works better.
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