All Topics / Legal & Accounting / replacing fencing… what do i need to know re tax??

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  • Profile photo of mizfitzmizfitz
    Join Date: 2013
    Post Count: 26

    Greetings knowledgeable ones,

    My first IP which i purchased in october is under going a fencing makeover, i have 2 neighbours on board to go halves and am trying to get in contact with my other neighbour do their sides.

    As it is a recent purchase i have not yet done a depreciation schedule on it, should i do one before or after the fencing is done, or both? And im assuming it is of a capital works nature and would be treated differently than repairs.

    Please let me know if im on the right track or if i have missed something

    Thanking you in advance


    Profile photo of ducksterduckster
    Join Date: 2004
    Post Count: 1,674

    Check with your accountant if fences are depreciation allowable.

    As you purchased the property with the fences in the state they were in the fences are not a claimable repair.

    Also replacing the fence in its entirety makes it capital improvement rather than repair.

    Keep the receipt of the costs to you for the fencing and show it to your quantity surveyor or accountant. 

    Profile photo of mizfitzmizfitz
    Join Date: 2013
    Post Count: 26

    Hi Duckster'

    Thank you for your input, at least i am on the right page!!


    Profile photo of TheBishTheBish
    Join Date: 2007
    Post Count: 59

    You should get a Depreciation Schedule done by a Quantity Surveyor asap – in my experience they are well worth the cost – unless your house has absolutely no valuable items making it up – you may be surprised what they find. Once you have that as a base you can add the cost of the fence or anything else you purchase to your capital base.

    Your portion of fence cost is definitely capital and not a repair.

    Profile photo of James MavJames Mav
    Join Date: 2014
    Post Count: 7

    Hi Mizfitz,

    Depending on the age/value of your property it may or may not be worth hiring a quantity surveyor, generally speaking if your house is less than ten years old, it is almost always worth the cost (should be around $800) else it would depend on the individual situation.

    The best way is to give your accountant the details of the property and they will be able to help you decide whether hiring a quantity surveyor will be worth the cost.

    In regards to your fence, because you are replacing the entirety, it is considered a capital works deduction (Fences are not considered separate assets) and will be depreciated at 2.5% pa (should you choose to hire a quantity surveyor, they would include this in their calculations).

    Hope this helps.

    James Mav

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