Depreciation question - Titled courtyard

[dajackal]

hi, i'm wondering from a depreciation perspective whether a large titled garden courtyard (80-100sqm) will add to the depreciation benefits as compared to a similar unit with two balconies.

the building is 9 years old with 12 units in the building

 

[depreciator]

Depends on the size of the balconies.
The technical answer is there will be bugger-all difference.
Let's say a slab on ground cost $100 per square metre.
And a suspended slab + railings etc might be $250 per square metre.
An 80sqm courtyard and a 30sqm might work out similar in cost.
But even if the cost is different, they depreciate at 2.5% so the difference in depreciation isn't going to be worth thinking about.
You need to consider which property will give you the better rental return and growth.

 

[dajackal]

many thanks

i ran my numbers assuming there wouldn't be any difference, but was quietly hoping that might've been.

reason being, not so much the depreciation of the courtyard itself, but with more sqm on title, that there would be more entitlement to the building depreciation.

 

[depreciator]

Possibly. Your unit entitlement might be more. But it really won't make much difference - not enough to be a factor in a purchase decision if you're tossing up between two properties.

 

[DaveM]

Scott as the slab and railings etc on the courtyard would likely be common property and the title is just the air space contained, would there even be any depreciation of building available?

 

[depreciator]

It will depend on what the paperwork says. But it won't have much impact whether it can be included or not.