Deppro quantity surveyor experience

[retiringat40]

Just wanted to let people know about my experience with Deppro.

After completing our renovation in Brisbane, we book a quantity surveyor with Deppro. They send me an application form, of which one of the questions is, Please list value of all amendments/renovations made to property since you bought it. The completed form is returned to them, explaining that a full reno was done on the property, and a list would be made available to them on day of inspection.

I was not impressed. I muttered under my breath while I compiled a four page spreadsheet for all products, down to every nail, we had bought for the renovation.

The quantity surveyor comes. He says "I have good news and bad news. The good news is that I'm here. The bad news is that I don't have to be here."

Huh?

It turns out that because we did a renovation and then got a quantity surveyor in, we already had receipts for the work we did and therefore didn't need him. Our mistake was not getting him in in the beginning when we bought the house even though at that time it was just our PPOR.

Therefore the lesson was - Get a quantity surveyor into your house when you buy before you renovate, if there's any chance of it turning into a rental.

I was very impressed with Deppro. Why? He turned up even though he could have explained it all on the phone; he walked through the house and confirmed that the only old stuff left that he could depreciate was a front porch light and a hot water heater; and they gave me a full refund back.

Very positive experience.

Disclaimer: I am not related to Deppro in any way. This is a true experience.

 

[Cosmo]

Doesn’t it work like this?

Before renovations get a QS to draw up depreciation report on the old house. Renovate house. Get the QS back. Ask the QS to write off the old depreciation report and start a new depreciation report on the renovations. You don’t have to tell him costs etc he should be able to work that out. For example if you do some of the work yourself it's no use telling him that the new vanity cost $400 because if a plumber installed it it would be more like $700. Your QS will take this into account if you don’t provide receipts etc.

Keep your receipts until after the job. If the QS estimate is less than your bill bring it to his attention.

Yes, Deppro are good.

 

[hwd007]

I have had two DepPro schedules done and I must say I and my accountant were very impressed with the comprehensive detail of their reports. I will go to them again for my next schedule also.

 

[retiringat40]

Cosmo, apparently not.

From deppro's own articles - http://www.deppro.com/article.asp?article=35

An extract from the article:
"[He had read]...in doing your own renovations it is a good idea to commission a Quantity Surveyor to value the finished renovations because chances are they will value them at a higher value than what you paid! This is also wrong and if any article alludes to this then they are mistaken. As an investor you can only depreciate the invoiced amount of the renovation or the assets, not what it is worth or valued at.
Legislation clearly states that when claiming on any post purchase expenditure you are obliged to hold receipts in the amounts claimed, otherwise a deduction will not be allowed. "

I was confused by that because I have read previously of posters in this forum using Crazy Clark's $20 stainless steel bowls as their bathroom basin, and getting a claim for say $500.

 

[hwd007]

As I understand it, receipts will always override QS estimates of value, if the ATO demands them be presented. Generally however the ATO recognises the professionalism of a quantity surveyor and in fact I understand they recommend a qualified QS be used. This is because receipts are just receipts, and do not provide indication on how items should be depreciated in accordance with ATO guidelines.

I also understand that by law, the seller must provide detail on construction costs if he has them available.

Even if the receipts are not available, the ATO will have the final say on what is deductible regardless of QS estimates, as well as how it is deductible and how much of it is deductible. Not 100% sure about this though.

 

[jguye]

Deppro Vrs Property Return

I hear that the EX MD of Deppro has set up www.propertyreturns.com.au ???

 

[aaiqs]

There is a common misconception around property investors and property consultants that you do not require receipts where you make improvements to a rental property because a quantity surveyor (QS) can value the items for you. However, in reality, and, as common sense would indicate, if you make a capital improvement to your rental property and it costs you $1,000 then you can only depreciate $1,000 and yes you may be required to show evidence by way of a receipt, bank statement, etc. A QS may include the $1,000 in his schedule but this is based on your advice and you are responsible to justify this expenditure in the event of a query from the ATO.
A QS is required where the capital improvements were completed prior to you buying the property and, as such, you don't know the cost of the improvements.
Where residential properties were constructed after 18 Jul 1985 a QS is also required to assess the original construction cost as this is also depreciable.
Thus, in summary:
For unimproved pre-18 Jul 1985 properties a depreciation schedule by a QS is not necessarily required. You are still entitled to depreciate the plant and equipment in the property (carpets, blinds, appliances, hot water system, fans, etc) but these can be claimed based on self-assessment with the help of your accountant and you do not necessarily have to go to the expense of engaging a QS. If the investment property is in a high-rise building or a large complex with extensive common property and facilities it may still pay to engage a QS because there will be other plant and equipment items to common areas that may be beyond your self-assessment capabilities.
For pre-18-Jul 1985 properties where capital improvements have been completed by previous owner(s) you will require a QS to estimate the cost of the improvements and prepare a depreciation schedule before you can claim depreciation on the improvements in you tax return. If the capital improvements are minimal then you may also want to weigh up the cost of the schedule vs the return in depreciation deductions. Don't forget plant and equipment can still be done based on self-assessment so if the only improvements to the property are new carpets and blinds then you still may not need a QS.
For pre-18 Jul 1985 properties which were unimproved by previous owners and have been renovated/improved since purchase then you need to retain receipts and approach your accountant to see if he can prepare a depreciation schedule based on your documented costs. In some cases, where extensive renovations have occurred, your accountant may still suggest engaging a QS.
For post-18 Jul 1985 properties a depreciation schedule is required from a QS regardless of whether improvements have been made or not.
As for when is the best time to engage a QS if you are making renovations to a rental property, this is best assessed on a case by case basis because it depends on the extent of the renovations, whether the property was rented previously, etc, etc so best to talk to a QS first. Either way it is probably a good idea to take photos of the original property before renovating.

Disclaimer: The above is written by a qualfiied QS* not associated with any of the companies previously named in this forum.
*If you seek the services of a qualified QS and don't want to be ripped off by someone calling themselves a QS whilst not actually being qualified be sure to engage an Associate member of the Australian Institute of Quantity Surveyors (AIQS).
Cheers