depreciation on old IP with recent extension

[Soren Lorenson]

Hi all,

we recently bought an IP, thats a 1950 weatherboard but has recently (2004) had an extension built, the cost of the extension was about 60K from the documents in the section 32.

Can this be depreciated over the next few years?

is it wise to get an expert to do this? from a tax point of view?

t i a

-soren

 

[devo76]

Sure can. My ip is a weatherboard town house built in the 50,s. In 05 it had a major reno at a cost of around $110,000. Got a quantity surveyor in to confirm and all is legal. Plus it has all the usual internal stuff to depretiate as well so for a older house its actually quite good tax wise.

 

[BayView]

Hi all,

we recently bought an IP, thats a 1950 weatherboard but has recently (2004) had an extension built, the cost of the extension was about 60K from the documents in the section 32.

Can this be depreciated over the next few years?

is it wise to get an expert to do this? from a tax point of view?

t i a

-soren

get a Depreciation Schedule prepared, Soren.
It'll cost around $500 and is tax deductible, and will pay for itself in year 1.

 

[Soren Lorenson]

Sure can. My ip is a weatherboard town house built in the 50,s. In 05 it had a major reno at a cost of around $110,000. Got a quantity surveyor in to confirm and all is legal. Plus it has all the usual internal stuff to depretiate as well so for a older house its actually quite good tax wise.

thanks i think it wise to get it done, just wondering how much of a tax write off it will make?

if the 500 bucks for the depreciation report is also a write off then that makes it easier, so this is only done at the start and doesn't have to be done year in year out right?

-s

 

[Aimjoy]

so this is only done at the start and doesn't have to be done year in year out right?-s

That's right - it's just a once off thing.

Aimy

 

[devo76]

thanks i think it wise to get it done, just wondering how much of a tax write off it will make?

if the 500 bucks for the depreciation report is also a write off then that makes it easier, so this is only done at the start and doesn't have to be done year in year out right?

-s

Correct Mine is 2.5% of $110,000 = $2750
Also About $4,000 in fittings etc for a total of $6,750 of my taxible income.

With a tax bracket i think of 39% that equals a $2,632 tax refund on building right off and depretiation alone. Well worth doing for me

 

[WashingtonBrown]

Hi all,

we recently bought an IP, thats a 1950 weatherboard but has recently (2004) had an extension built, the cost of the extension was about 60K from the documents in the section 32.

Can this be depreciated over the next few years?

is it wise to get an expert to do this? from a tax point of view?

t i a

-soren

Hi

Very very often when we ascertain the costs from the local authority, we overwrite these numbers - because they are unrealistic.

Developers will - or have in the past - put a minumum amount on the DA form because in most councils the fees are determined by the construction cost.

Larger councils now have a 3rd party qs checking these costs submitted by the developer.

We submits lots of cost plans to councils these days...and fairly often we are arguing with other qs's employed by the council as to what is reasonable.

Because of course no one knows until 12 months after the project wat the real build cost is!

In relation to your 60k spend - the key here is the separation of this figure into plant and building this is why you would pay someone like our firm.

All the best.

Regards