Depreciation on landscaping

[srini]

We will settle on a new PPoR in March and the current one will become an IP.

We built the current PPoR with Porter Davis so have all the contracts, original cost of construction, fixtures fittings etc. We also have receipts from the landscaper to show the costs of those things.

When it comes time to do a depreciation schedule, would things like landscaping be included in there somewhere? I've used Depreciator in the past and they provide a great service and value for money. Will definitely use them again, but just wondering how landscaping is treated from a depreciation perspective.

 

[Television]

We will settle on a new PPoR in March and the current one will become an IP.

We built the current PPoR with Porter Davis so have all the contracts, original cost of construction, fixtures fittings etc. We also have receipts from the landscaper to show the costs of those things.

When it comes time to do a depreciation schedule, would things like landscaping be included in there somewhere? I've used Depreciator in the past and they provide a great service and value for money. Will definitely use them again, but just wondering how landscaping is treated from a depreciation perspective.

Depends on what you classify as "landscaping".

If your landscaper did "hard landscaping" things like build a water feature, a fancy letterbox, a 600mm high crib block retaining wall, some concrete pavements, they could be included.

However "soft landscaping" such as lawn, shrubs, trees, etc. will not be considered in your depreciation schedule.

 

[Blueberry]

as a different poster with similar topic. After our depreciation schedule was done, we had some "hard landscaping" done. Would we have to get an amendment to our existing schedule or what?

 

[depreciator]

You could give the costs to your accountant, or get whoever did the Schedule to update it. We update them all the time.

 

[Blueberry]

thanks that sounds like an easy solution

 

[srini]

Hi Scott,

Will get in touch when we're ready to move out and advertise it for rent.

Thanks
Srini

 

[geoffw]

However "soft landscaping" such as lawn, shrubs, trees, etc. will not be considered in your depreciation schedule.

So "plant and equipment" doesn't include plants?

Presumably they don't depreciate.

Can any planting in an IP be written off against tax in any way? What about tree removal?

 

[Television]

So "plant and equipment" doesn't include plants?

Presumably they don't depreciate.

Can any planting in an IP be written off against tax in any way? What about tree removal?

From a depreciation standpoint, no. Things like excavation, demolition, plants (but not plant ) cannot be depreciated/included in a depreciation schedule.

I would think that tree removal might be claimable as an expense if the tree was potentially going to damage the property...?

 

[geoffw]

If landscaping items are not depreciation, can they be included in cost base or otherwise written off eventually?

 

[Television]

If landscaping items are not depreciation, can they be included in cost base or otherwise written off eventually?

I don't believe I know the answer to your question, sorry. Might have to PM depreciator.

 

[depreciator]

I guess the easiest way to explain why plants, grass etc can't be depreciated, is that depreciation rates are driven by the ATO designated Effective Lives for stuff. The Effective Life is how long the ATO think something will last with fair usage.
A house constructed after September 87 has an Effective Life of 40 years, so it depreciates at 2.5%.
Carpet has an Effective Life of 10 years.
An oven is 12 years.
etc etc.
Grass can die in a fortnight. So can a tree. Bark chips can blow away. So plants and stuff like that don't come into depreciation.

I don't like to stray far from depreciation, but I'm sure an accountant will chip in and say how they treat this stuff. The purchase of turf etc certainly wouldn't be expensed.

 

[railer]

. The purchase of turf etc certainly wouldn't be expensed.

Perhaps if it's is artificial turf? That would have a reasonably ascertainable lifespan.

 

[depreciator]

Yep, artificial turf has good depreciation - just as well given the good stuff is pretty expensive.