Depreciating a new granny flat build

[menty]

I will be building a granny flat very soon, and am wondering about the processes of depreciation.

My builder has given me a fixed price of 108K, and for me to pay him in installments.

With regards to tax time next year, would it be easier if I got him to break that down into what everything costs to build, or is that not necessary? As a new building it should be able to be depreciated I assume.

I did approach him earlier about doing this but he had no clue.

Had a look through the ATO website, and a lot of things are classed as capital works.

Hence, would it be worthwhile tax time if he prepared an invoice for me like this
Architect fees - $x
Engineer fees -$x
Foundation excavation costs -$x

Building fee -$x

(then add on the things that I can depreciate)...
Hot water system (excluding piping) - $x
Exhaust fans (bathroom) -$x
Smoke alarm -$x
Cook top -$x
Oven -$x
Rangehood -$x




I also want to add a fence later and some more concrete for landscaping, and 2 sheds, and blinds. Will I be able to depricate those?

Not really sure how to do this. Would it be more ideal to just get a quantity surveyor in after it is built?

 

[depreciator]

Yep, architect, engineer and all fees are added to the cost of the building and written off at 2.5%.

Assset i.e. stove, floor coverings, HWS etc are depreciated individually.

Tell the builder that you don't want to know what he paid for them. The reality is you paid 'retail'.

If you get all those costs, your accountant should be able to do it.

Or a QS would do you a Dep Schedule without needing to go to site = cheap.

Anything you do down the track gets added to the Schedule. We do updates free.

Scott

 

[menty]

I assume those are the only assets that I can depriciate?
He is writing me a separate invoice for architects fees etc. Can I still depreciate it at 2.5% then?

 

[devank]

Builders get stuff like stove, Aircon and HWS for much better price. So it may not work in your favour. Just get the brand & model and give it to the depreciators.

 

[depreciator]

I assume those are the only assets that I can depriciate?

It depends on what Assets are in the place. Typically, a $100K granny flat will have a cooktop, oven, rangehood, HWS, exhaust fan, floor coverings, curtains/blinds, split system. You might have other Assets.

He is writing me a separate invoice for architects fees etc. Can I still depreciate it at 2.5% then?

As I said, architect fees etc are all added to the build cost. The building gets depreciated at 2.5%.

If your total spend was $108K, and all Assets were included in this, you need to deduct the cost of the Assets to arrive at the net build cost. Then you depreciate the Assets individually.