Do new townhouses normally come with a Deprec. Schedule?

[onion33]

When hunting for new property, I read that the builder of the development may provide a depreciation schedule so you can assess the cash flow before you buy.

I attended an open for inspection for a new townhouse. I asked the agent if they had a QS. He said "no, most places won't provide you with one".

Is this correct? If it is, how do I estimate the depreciation benefit BEFORE buying and without paying for a report (happy to pay for report once bought, but just want an estimate to assess cash flow).

Thank you.

 

[tobe]

It is correct, and Im not sure, as the QS will most likely want money before he prepares the report.

You can do an estimate yourself I guess if the developer/builder will give you a breakdown of costs for each item? But thats unlikely too.

 

[D.T.]

Thats correct, they won't provide you with one. You need to organise your own after you purchase.

 

[BMT Tax Depreciation]

When hunting for new property, I read that the builder of the development may provide a depreciation schedule so you can assess the cash flow before you buy.

Hi, Onion. Good question and this is a common issue that results from confusion between two different things. What you're talking about is not a depreciation schedule but merely an estimate. A QS will often perform this as a free service to help developers or real estate agents market a property to investors. We would use the plans, inclusions, costs and other factors to make a reasonable minimum/maximum projection, which in our case is for 10 years. An actual schedule lasts for 40 years and the estimates are not usable for the purposes of claiming depreciation.

I attended an open for inspection for a new townhouse. I asked the agent if they had a QS. He said "no, most places won't provide you with one".

Is this correct?

This is correct in most cases. Sometimes a builder will provide a very basic schedule from their costs, but I stress the word "basic" here. Sometimes the developer will buy in bulk from a QS as a value-add for purchasers, but this isn't common.

If it is, how do I estimate the depreciation benefit BEFORE buying and without paying for a report (happy to pay for report once bought, but just want an estimate to assess cash flow).

Any QS firm worth its salt will be able to help you with this. For example, BMT is happy to give a free first-year estimate if you provide a few details on the property (an online listing or development website is very helpful!). You can also use depreciation calculators like the one found here:

http://www.bmtqs.com.au/tax-depreciation-calculator

I hope that helps. Let me know if you want anything clarified!

Chris