Depreciation

[JBY]

Hi all,

Just a quick question - My girlfriend is about to rent out her PPOR and therefore convert to an investment property. I advised her to get a depreciation schedule from a quantity surveyor, but I've just found out that her unit was constructed in 1985. Not sure the exact date.

I am under the impression that properties built between July 17th, 1985 and September 16th, 1987 have a 4% capital allowance, and those built from September 16th, 1987 onwards have a 2.5% rate.

Therefore, does this mean that any property built before July 17th 1985 is not eligible for depreciation?

Given the age of her unit, is it still worthwhile getting a depreciation schedule for taxation purposes?

Cheers,
Justin.

 

[JoshyBoi]

talk to scott aka depreciator, he'd be best to help you out

 

[depreciator]

Thanks Josh.
Justin, the relevant date is 'construction start', too. So it sounds like she's out of luck.
There is likely to be over $1,000 depreciation in the first year just in the Assets.
If she has any photos of the place, send them to me and I'll give you a better idea.
[email protected]

 

[JBY]

No photos at the moment.

Its a 2 bedroom brick duplex. Just need to know that based on the information provided whether or not it is worthwhile paying $600 for a depreciation schedule.

Cheers.

 

[Luv2Travel]

No photos at the moment.

Its a 2 bedroom brick duplex. Just need to know that based on the information provided whether or not it is worthwhile paying $600 for a depreciation schedule.

Cheers.

Depreciator is the expert here, but my gut feeling would be to say yes. I bought a property recently built in 1987 so I do fall into the building depreciation, however I was surprised at the amount of depreciation on my fixtures & fittings. Carpets, HWS, curtains, old air conditioner, heater etc. etc. Of the $25K or so of deductions they found for me, I reckon about $12K of it was fixtures & fittings which your girfriend would be entitled to. Remember also that the $600 quantity surveyor fee is also a tax deduction. I paid it and got about $2,000 of depreciation deductions in my first tax return (which was only about 6 weeks of owning the property).

 

[depreciator]

Possibly not.

So it has a pre July 85 build date and presumably is unrenovated.

That means your available depreciation will be in the Assets/fixtures and fittings e.g. stove, carpet, HWS etc.

It comes down to the quality of the Assets.

Your girlfriend is still living in the place? Does she have a camera?

I would hate to see her waste $600.

Scott

 

[JBY]

Thanks to you all for your feedback, I really appreciate it.

The place has definately not been renovated and needs some minor painting work done. Id probably say all the fixtures are the original ones and quite old, except mabe for the air conditioning.

Id also suggest the quality of the fixtures are quite average given their age.

Im not sure she presently has easy access to the property in order to take photos.