building depreciation

[stirling]

If a second hand timber frame building is put on a block last year and then the property is purchased by myself, does the depeciation of the building start from last year depreciating the second hand cost of the building, and depreciate over 40 years.

Stirling

 

[sbe]

Depreciation starts from the time it's built, for building cost.

Providing you haven't moved a house there, but built (regardless of new / second hand material), normal depreciation applies from build date.

Normal disclaimers - check with your accountant blah blah.

 

[stirling]

The question is now what is the definition of "built"
If you have two halves of a house and join them together have you built a house?
What about if you have 10 bits and join them together have you built a house?

Stirling

 

[Brenda Irwin]

Hi Sterling, I recently purchased a house in a similar situation.

QS started construction cost from the time it was placed on the block.

Government is not anti recycling & QS did comment that upon relocating that house, site had to levelled & cleared, house had to be restumped, rewired, replumbed, cracked glass in windows replaced, & front fence installed.

Sounded like building from scratch or relocating cost not a lot different.

Cheers Brenda

 

[mross]

Stirling,

The part of the property that is already built is the structure or building part which you rightly say depreciates over 40 years from the time construction is completed.

The question here is whether the construction was completed. I would suggest you have bought a project in the middle and therefore you haven't yet got a completion date.

The commencement date of construction is used to determine what legislative period the works falls into, but the construction completion, or date the property is available for rental is the start date for depreciation.

Hope this helps

Michael