Depreciator - I am confused

[sandyr]

Scott - Are you actually a Quantity Surveyor? i looked on the AIQS website and cant find you or Depreciator there....???

Wats the story? :confused:

[Mry]

Scott - Are you actually a Quantity Surveyor? i looked on the AIQS website and cant find you or Depreciator there....???

Wats the story? :confused:

This question would have been better asked through a private message. Asking someone publicly about their credentials could be taken the wrong way.

[depreciator]

Hi Sandyr
I wouldn't plug the AIQS if we weren't a member. Go to the site again - www.aiqs.com.au Then to the Find a Member (Business Register). Then 'Find a QS firm'. Type in our name, and bingo, there we are. That's where you'll find BMT, Washington Brown, Napier and Blakeley etc.

[sandyr]

I dont know it could be taken the wrong way?

I think if some one is on this site acting as the resident expert on a matter it is quite reasonable to make sure that person has the creds to back it up?

I went on their website and cant find the people on depreciations website listed as members....

And i aksed why?

Whats wrong with that?

I now see their company listed - but is HE a member ? Does he have any qualifications?

If i went to a doctor - i would want to make sure they studied medicine and are a member of the relevant profession...wouldn't you?

[Simon]

Sandy,

Surely a professional way to check is to call the guy and ask for some proof, not raise it here.

Now this has been raised on a public forum I hope you will post any positive results here as well.

[depreciator]

Sorry, I missed part of your question, Sandy. Am I a QS myself? God no. It would be a terrible job.

I employ them, engage them on contract, and manage them.

I also know far more about the tax rules pertaining to depreciation than most of them.

Property investors (and I'm one myself) need to realise that Tax Depreciation Schedules represent a small part of what the average QS does. They do cost plans and builders bills of quantity, they manage staged payments on projects, advise on sinking funds, determine insurance replacement cost valuations, assist in disputes etc etc.

Many won’t touch tax work – too seasonal + the rules keep changing.

All we do is tax work. And we use quantity surveyors for what they are best at: estimating the original construction cost of a property and assessing the value of assets.

Could I walk into a 5 year old unit on the fifth floor of a ten storey complex and be able to determine the original construction cost and the written down value of assets? Nope.

But when those cost are provided by a QS, do I know how to apply the most current ATO rules to put together an ATO compliant Tax Depreciation Schedule? Yep. (To be honest, it’s not really that hard. The hard part, and the part that the ATO designates must be done by ‘an appropriately qualified person’, is calculating construction costs.)

The QSs who work for us like the fact that they don’t have to bone up on tax rules and that they can concentrate on what they’ve been trained to do.

Coincidently, we had a call this week from someone with an investment property on the NSW south coast. They had engaged a local QS to do a schedule on their property and paid him $400. The QS gave them a construction cost and an opening value for all the assets in the property, but no Tax Depreciation Schedule.

To his credit, he said ‘I don’t do that bit’ when he delivered the schedule. The client’s accountant wasn’t keen on doing it either. So the client called us. Because the costs were determined by a QS, we can use them to put together a 20 year schedule.

I’ll have a go at answering any questions on depreciation rules because I know a bit about them. They’re on the ATO site and in the Master Tax Guide, so they’re not really a matter of opinion. The ATO is pretty clear about what can and can’t be done and we follow this to the letter. Anybody can study up on the rules, and if construction costs are provided by ‘an appropriately qualified professional’, anybody can really put together a Tax Depreciation Schedule.

Of course, if somebody asks me a question about construction cost, I will always defer to an expert - luckily I have a few.

The good thing about this site is that there are people like MRY, Julia (from Bantacs), Dale etc who know more than any of us and who comment if there is anything amiss.

Regards,

Scott

[sandyr]

Fair Enough...at least you are honest. :)

I guess now we know you are not...i think alot of people here wouldv'e assumed you are - and i don't think you have tried to openly tell people this.

Oh well whatever...

One thing though....Who signs the reports?? None of the people listed on your website seem to be QS's.?

From wat is says "has been involved in the qs industry.." doesn;t exactly say he is a QS.??

[depreciator]

Yep, honest and pretty blunt at times. If we weren't honest we wouldn't have national affiliations with: The Count Wealth Group (800+ accounting/planning practices), the Ray White Group, Century 21 Australia and the Australian Institute of Conveyancers.

A big chunk of our business comes via accountants.

I just answer questions, and I think you are the first person who has asked me if I'm a QS. If I was going to pass myself off as something I'm not, I would pick something far more glamorous.

Matthew Saunderson is our in-house head QS (though he spends a fair bit of time on the road). Matthew checks and signs off every report - now that's a really bad job.

The construction costs estimates are put together by the QSs who inspect the properties - this is 'best practice'.

Go to www.aiqs.com.au again. Then 'find a Member' again. This time, you need the left hand side of the page. Type in Matthew Saunderson (NSW).

And there he is.

Matthew also does our trickier Sydney inspections - there is a 6 million dollar house he has to next week and it will be a tough one. I haven't broken the news to him yet.

Regards,

Scott

[coastymike]

I don't think that Scott has tried to hide anything from anyone. We have used Depreciator for a number of our clients and they have been very impressed (and so have we) with the end result. We have had an audit on one client for which Depreciator prepared a depreciation schedule and the client came through the audit with flying colours.

Am I concerned that Scott is not a QS. Of Course Not. He is a business manager who recognises his strengths and weaknesses and employs individuals to ensure that his weaknesses are turned into strengths. Scott is excellent at managing his company, his staff, analysing the QS reports in light of tax rulings and ensuring that a report is prepared and distributed by his company to his clients in a timely manner, easy to read and able to stand up to scrutiny from the ATO. Has Depreciator achieved this. Well from all accounts I have heard yes.

Just because he isnt a QS doesnt mean that Depreciator is in some way lacking (which I almost seem to infer from your post). It is like being concerned that John Fletcher had no previous retail experience prior to his appointment to Coles Myer. Just ask the shareholders of that company if they are happy with his management. Of course they are (well except for good ole Solomon Lew). Could John Fletcher stock shelves, reorder stock, negotiate contracts with local and international farmers, drive the forklift trucks, etc. No. That is not his strength. His strength is managing a very successful company and other people support him to achieve his goal. In my view Scott does the same.

[sandyr]

Oh come on...

I and everyone on this forum wouldve had the impression - until today - that he was a QS. The website implies it somewhat as does his posts.

He mentions Julia from Bantac...BET she is an accountant...

I bet everyone that he has responded thought they were getting advice from a QS.

Now have the relied on this advice.....

I BET there Professional Indemity Insurer (if they have one) doesn't know that a Non QS is giving this type of advice on the net in a public forum logged as the co. name. :eek:

[coastymike]

Actually I never make such assumptions sandyr. I have always assumed that Scott owned Depreciator and given his time spent with accountants, answering queries, etc I really didn't think he had time to go and personally inspect every property that a valuation was done.

You are really missing the point sandyr. The people providing the valuations are QS's and are qualified to provide a professional valuation. Scott manages the company, his staff and is a representative for them.

When Fred Hilmer discusses Fairfax's latest results do you wonder whether he has ever worked a printing press or written an article for the SMH (he hasn't because he was an academic prior to his appointment to Fairfax. You really are totally missing the point.

Sandyr I knew that the reports were coming from a firm that employs QS's to provide the valuations. I never for one moment thought that Scott was driving around Australia doing his own valuations whilst also trying to run his company. Similarly I also don't expect that Mry,Julia, Dale, Nick, myself or others who provide some accounting guidance prepare every single clients returns. We have staff that perform certain functions, some we outsource to other professionals and then finally we as partners manage the practice, review work, provide high level advice to clients and try to have one day a week playing golf, drinking, sailing or whatever else takes our fancy. What is the difference sandyr ?

It would have been much more appropriate to take your private grievances directly to Scott but alas you have decided to bring personal differences into a public forum. One of the drawbacks from the internet but I'm sure people will give you as much credence as it deserves.

[Mry]

He mentions Julia from Bantac...BET she is an accountant...

I bet everyone that he has responded thought they were getting advice from a QS.

One of the best signatures I have seen in a forum is "I am a lawyer, but I am not YOUR lawyer."

I find depreciator's advice very thorough and informative and hope he continues to post. I would also think that one would have little chance of succeeding with a suit against someone, who has given accurate advice and information, with whom you do not have a direct engagement. I also recommend that anyone who receives information from this forum vet it first with their accountant before relying on it. I wouldn't make final decisions about things that involve my money solely on the meanderings of an anonymous internet forum contributor.

[Simon]

Oh come on...

I and everyone on this forum wouldve had the impression - until today - that he was a QS. The website implies it somewhat as does his posts.

He mentions Julia from Bantac...BET she is an accountant...

I bet everyone that he has responded thought they were getting advice from a QS.

Now have the relied on this advice.....

I BET there Professional Indemity Insurer (if they have one) doesn't know that a Non QS is giving this type of advice on the net in a public forum logged as the co. name. :eek:

I would recommend that no one takes action on the advice of anyone in a forum without independant research or checks. Including myself.

Would you rely on any strangers advice that you meet in a crowded room?

Cheers,

[Aceyducey]

I tend to fall on Coasty's side.

There are many people on this forum, myself included, without degrees in Property Investing.

However they often say interesting and important things that are worth considering.

As always you should seek your own professional advice.

Cheers,

Aceyducey

[depreciator]

Gee, hasn't this thread taken on a life of its own. I think it might be time to wind it up.

Thanks for the support MRY, Coastymike and Simon.

I don't really give advice. I'm careful about that. As I said, all I do is answer questions and put ATO speak into language people can understand. The rules pertaining to depreciation are pretty straightforward.

Once or twice I have written from the perspective of a property investor and made clear this fact. See below from one of my posts:

It's a good idea if you decide to turn your home into a rental property, to get a valuer to value it when you do this even if you have not made any substantial improvements to the property.
The above is straying beyond my area of expertise, so feel free to set me straight - in this post I'm just another property investor trying to make sense of something.

I like this site because I am an investor and there is lots I don't know.

The QS industry is going through some changes as they grapple with the growth in 'mums and dads' commissioning Tax Depreciation Schedules. Some companies are coping better than others. I talk regularly with a couple of the guys from BMT as well as Tyrone, who runs the tax division at Washington Brown. Sure we're competitors, but I respect the way they operate and all of us have a vested interest in keeping an eye on operators who concern us (and the ATO and AIQS).

Sandyr, it may be time for you to show your hand. You've made 6 posts in total, all interestingly related to depreciation. In your first post, you made an incorrect assumption and got stuck into BMT. (In that post you demonstrated some industry knowledge, too.) Post number 2 was a glowing endorsement of Washington Brown. Then there have been the 4 posts in this string attacking me. If you work for a QS company, why not identify yourself and try and add some value to this forum? You could give me a hand answering questions. C'mon, it's fun.

[Sultan of Swing]

Hi Scott

I'd like to thank you for the info you've posted so far. Its all been good and given me and I'm sure others, an insight into what you do.

Keep on posting!! :)

[quiggles]

Gee, hasn't this thread taken on a life of its own. I think it might be time to wind it up.

(SNIP)

Sandyr, it may be time for you to show your hand. You've made 6 posts in total, all interestingly related to depreciation. In your first post, you made an incorrect assumption and got stuck into BMT. (In that post you demonstrated some industry knowledge, too.) Post number 2 was a glowing endorsement of Washington Brown. Then there have been the 4 posts in this string attacking me. If you work for a QS company, why not identify yourself and try and add some value to this forum? You could give me a hand answering questions. C'mon, it's fun.
And THAT, ladies and germs, is how a good and professional forum member handles this sort of situation.

Hats off to you, depreciator. I've received good advice from you which I have since later confirmed and it has cost me money but made me more ATO-proof. Guess which I value more?

[Jamie]

Hats off to you, depreciator. I've received good advice from you which I have since later confirmed and it has cost me money but made me more ATO-proof. Guess which I value more?

Agree completely. I've had a question in the past that Scott has answered promptly and efficiently, with no offer of financial reward for his time. His contributions are much appreciated and I hope they continue.

Sandy, why not offer your own obvious expertise so the rest of us can benefit?

Jamie.

[depreciator]

I went to the Annual General meeting of the AIQS (NSW Chapter) last night.

They let me in because I knew the secret handshake.

I was hoping to catch up with Sandy for a chinwag and a beer?

It was one of those AGMs where nobody says 'boo'.

The minutes of last years AGM were acknowledged, the Treasurer's report was read, office bearers were elected unopposed, a couple of scholarships were handed out. They said:'...if there's no other business then, we'll wrap up the meeting...'.

Then I stuck my hand up.

I raised concerns about the practices of some of the companies doing Tax Depreciation Schedules and pointed out as that this work represents the AIQS/public interface it's important for the profession that we get some consistency. I quizzed them on the agenda for their upcoming meeting with the ATO concerning depreciation. And I gave them some suggestions for what I felt they needed to do to raise the profile of the profession, given that this is one of the objectives in their new strategic plan.

Afterwards, they thanked me for my ideas and asked whether I could perhaps give them a hand with some of the things they were doing.

I wish you all could have seen their faces when I told them I wasn't a QS.

It's ironic that most industry groups benefit from an outsider's perspective.

Scott

[MasterInvestor]

Good on your Scott.

I will be coming to you for all of my schedules form now on.

Regards

Master Investor.

[cam]

HI SCOTT,
CAN YOU TELL ME IF YOU CAN USE FIGURES FROM A DEPN SCHEDULE OF A PREVIOUS OWNER ...??

RISorry, I missed part of your question, Sandy. Am I a QS myself? God no. It would be a terrible job.

I employ them, engage them on contract, and manage them.

I also know far more about the tax rules pertaining to depreciation than most of them.

Property investors (and I'm one myself) need to realise that Tax Depreciation Schedules represent a small part of what the average QS does. They do cost plans and builders bills of quantity, they manage staged payments on projects, advise on sinking funds, determine insurance replacement cost valuations, assist in disputes etc etc.

Many won’t touch tax work – too seasonal + the rules keep changing.

All we do is tax work. And we use quantity surveyors for what they are best at: estimating the original construction cost of a property and assessing the value of assets.

Could I walk into a 5 year old unit on the fifth floor of a ten storey complex and be able to determine the original construction cost and the written down value of assets? Nope.

But when those cost are provided by a QS, do I know how to apply the most current ATO rules to put together an ATO compliant Tax Depreciation Schedule? Yep. (To be honest, it’s not really that hard. The hard part, and the part that the ATO designates must be done by ‘an appropriately qualified person’, is calculating construction costs.)

The QSs who work for us like the fact that they don’t have to bone up on tax rules and that they can concentrate on what they’ve been trained to do.

Coincidently, we had a call this week from someone with an investment property on the NSW south coast. They had engaged a local QS to do a schedule on their property and paid him $400. The QS gave them a construction cost and an opening value for all the assets in the property, but no Tax Depreciation Schedule.

To his credit, he said ‘I don’t do that bit’ when he delivered the schedule. The client’s accountant wasn’t keen on doing it either. So the client called us. Because the costs were determined by a QS, we can use them to put together a 20 year schedule.

I’ll have a go at answering any questions on depreciation rules because I know a bit about them. They’re on the ATO site and in the Master Tax Guide, so they’re not really a matter of opinion. The ATO is pretty clear about what can and can’t be done and we follow this to the letter. Anybody can study up on the rules, and if construction costs are provided by ‘an appropriately qualified professional’, anybody can really put together a Tax Depreciation Schedule.

Of course, if somebody asks me a question about construction cost, I will always defer to an expert - luckily I have a few.

The good thing about this site is that there are people like MRY, Julia (from Bantacs), Dale etc who know more than any of us and who comment if there is anything amiss.

Regards,

Scott

[depreciator]

Gee, this is an old string. I wonder whatever happened to Sandy?

Your question is straying into accountant territory, so MRY may correct me.

If you buy a property and the vendor hands over as a courtesy a copy of a depreciation schedule, that's great. There will be information in it you can use, like the construction cost.

If there is nothing in the contract of sale about 'written down values of Assets', you won't necessarily have to go with the written down values in the Schedule for the Assets like the stove, carpet etc. That means you'll be able to reassess the current values.

There would also be items in the Schedule that have been written off - especially items with a starting price of $300. You'd want these reassessed.

In commercial purchases, many contracts do in fact contain written down values. I believe some savvy solicitors acting for purchasers will get the mention of depreciation made 'silent' in the contract to the purchasers advantage.

If you have purchased a property and the vendor has given you a schedule, your accountant should be able to make use of it. I'd have to see it, but I'd say we'd be able to use it to generate a new schedule for $220.

Not sure whether the above makes complete sense. Feel free to call me.

Scott

[Mry]

I personally would never use an old schedule.

A depreciation schedule from a previous owner has the following problems -
1) The depreciation rates will probably have changed.
2) It will not mention items that the previous owner may have improved, renovated etc.
3) Common property improvements since the original purchase (where applicable) may not be included.
4) You don't get the guarantee from the old QS to help you out if the ATO comes knocking and asking depreciation questions.
5) Items in the depreciation report may have been destroyed, removed or replaced.

A new depreciation schedule usually has higher values than the old one (a bit of a bonus.) The old schedule may not be accurate either. Most of the schedules I see that people get from the old owners are not done by reputable QSs and are a load of codswallop.

You really are better off getting a new report for the property. In almost every case I have seen, a depreciation schedule pays for itself.

[WashingtonBrown]

I personally would never use an old schedule.

A depreciation schedule from a previous owner has the following problems -
1) The depreciation rates will probably have changed.
2) It will not mention items that the previous owner may have improved, renovated etc.
3) Common property improvements since the original purchase (where applicable) may not be included.
4) You don't get the guarantee from the old QS to help you out if the ATO comes knocking and asking depreciation questions.
5) Items in the depreciation report may have been destroyed, removed or replaced.

A new depreciation schedule usually has higher values than the old one (a bit of a bonus.) The old schedule may not be accurate either. Most of the schedules I see that people get from the old owners are not done by reputable QSs and are a load of codswallop.

You really are better off getting a new report for the property. In almost every case I have seen, a depreciation schedule pays for itself.

I would add the following....

1. Not only would have rates changed, but the effective life probably has changed to the advantage of the investor. More than justifying the fee immediately!!:)
2. Hard to equate sometimes - but well worthwhile to investigate!!:confused:
3. Can be tricky. This is an interesting area, please see my website. I wrote this recently http://www.washingtonbrown.com.au/uploads/SinkingFundArticle10_05.pdf

However wat u speak of - needs far more attention than i can give right now!!

4. Absolutely agree with this comment, in fact, our report and i'm sure most QS firms say thier report will become void if transferred between owners.

Not only do you settlement issues, you have purchase price issues, improvement issues, effective life issues...where do is stop!!!

5. I hear ya!!! All i can say on this is.....WATCH THIS SPACE.

Tyron Hyde
Director AAIQS
www.washingtonbrown.com.au
1300 99 06 12

[Simon]

The point I was about to raise is covered.

Just like a building report is valid just for the person who bought it. Whilst it may be useful reading you have no comeback against the advice provider should they give you dodgy advice. I imagine it works the same in QS world?

[WashingtonBrown]

The point I was about to raise is covered.

Just like a building report is valid just for the person who bought it. Whilst it may be useful reading you have no comeback against the advice provider should they give you dodgy advice. I imagine it works the same in QS world?

Hi Simon,

In my opinion the QS industry is quite tame. Which to me is A shame. I would use ONLY firms where the directors are actually qualified.

You see the problem these days is...that many NEW firms sub-contract out there work.

THATS GREAT ...But what happens in 6 years if that QS is not there....who represents you....the Secretary of the main firm????

Its ok to use sub contractors to do the inspectors..heck they might not even be qualified......BUT surely you would want the directors to be qualified

This can be easily qualified @ www.aiqs.com.au. Just to check the directors skills.

Regards
Tyron Hyde
www.washingtonbrown.com.au
1300 99 06 12