Depreciation on fittings on new build

[snivag]

Hi, can someone answer this question, I have bought a block of land and am now going to find a builder to build this investment property. Who can I speak to to find out what fittings will give me the biggest depreciation as this property will be negatively geared. For example floating floors or tiles, obvious example I know but this was the only one I could think of. Any advice gratefully received.
Thanks in advance.

 

[womble66]

The ATO site has a Rental Properties guide for 2009 that gives the the income and expenses that you can claim as well as depreiciation rates for the assets your will put in the new house.

www.ato.gov.au/content/downloads/IND00191817n17290609.pdf

For your one e.g., Tiles are capital works deductions which I think is like 2.5% p.a. over 40 years while floating floors are assets that you can claim 15% p.a over ~7 years. The guide above explains it better than me.

I could be wrong but so correct me someone if so.

 

[depreciator]

For example floating floors or tiles, obvious example

It might be obvious, but it's a good example.

Tiles have an Effective Life of 40 years. Floating floors have an EL of 15 years. Carpet has an EL of 10 years.

So you'll write-off the carpet more quickly. But sometimes carpet isn't the most sensible floor covering for an IP. It has a shorter Effective Life because it wears out more quickly.

Multiple split systems or room air cons will give you more depreiation than ducted air con. But depending on where the IP is, multiple splits might not make sense.

Curtains/blinds will be better than shutters.

Items under $1,000 can go straight into the Low Value Pool.

I'm not sure whether the marginal tax benefits of one fitting over another should be the deciding factor when specifying a rental property.

I guess in general terms, the more or your total budget that goes into fittings vs building, the more depreciation you'll have in the early years. But that might mean compromising the build quality.

Scott

 

[snivag]

Thanks for the replies on this post I have now picked a builder. In his itemized quote he has allowed $3750 for ducted gas (it has evap for cooling 'free') after speaking to heating installer he said allow for $4k but it should be nearer $3k. If I had the same system put in for the same price AFTER completion I thought I could claim the expense back on tax, which I couldn't do if it was built in the package.

 

[depreciator]

Doesn't matter when it goes in, you still depreciate the heater.

 

[Gools]

snivag, there's a rebate on ducted gas systems at the moment. $750 for 4 star and $1250 for 5 star. Make sure that everyone is clear on where the rebate proceeds go!!

Gools

 

[snivag]

Thanks Gools, funny how no one has mentioned that to me, will make more enquiries.