Flat pack kitchen or new benchtop & doors

[Skeetaboat]

Hi there seasoned renovators!

We're about to start our first major renovation and just wondering what are your opinions/experiences on completely ripping out old kitchen and putting in a new flatpack kitchen, compared to keeping existing framework and putting on a new benchtop, cupboard doors and drawers, plus replacing the tiles and appliances?

Is there much saving to be made in keeping the framework?

I think it would save in plastering and patching, rubbish removal, labour, and overall cost. Hubby thinks its better not to fiddle around with measurements and possibly cabinet makers and buy a flatpack from bunnings which we can install ourselves.

The house is 40 years old but in good condition, just very, very outdated.

What do you think?

 

[AndrewT]

We are also trying to work out what would be the best for our situation too, we have done a bit of research and quoting and came up with the following.

Existing Kitchen
* Custom made cupboards, drawers, hinges, handles ~$1700
(That was polyurethane painting and not the 'basic' cupboard design)
* Bench Top ~$1500+
(We found this to be varied the most, still haven't found someone we are happy with)
* Paint for framework etc ~$150
* Kitchen Mixer Tap ~$200
* Labour to be done by family friend, but would be a few hundred easily.
* Say $4000 overall to cover any extras.


Replace Kitchen
* Got a few quotes but to have the same size kitchen put in with a basic cupboard design was around the $7,000 mark.

Obviously there are big benefits for just putting in a new kitchen over working with the existing but I believe with a difference of over $3,000 (in our case) it would be worth every cent.

As I just wrote this post, it got me thinking. If the property that you are doing the kitchen renovation too is to be rented out, I wonder if the tax benefits (depreciation) would means that the cost of the new kitchen ends up being similar to the cost of working with the existing?

 

[Skeetaboat]

Hey Andrew, thanks for sharing. I thought it was likely to work out cheaper. We still need to weigh up the hassle factor of working with the existing, ensuring none of the old wood is visible, etc. Plus we need to consider the fact that it won't look as nice inside (not that that overly matters), and, as you say, the tax implications.

I have been trying to find out how it works with depreciation, but can't find much info except links to quantity surveyors advertising their wares. From what I understand about the way quantity surveying works, there are specific formulas for certain works/improvements that they use, so in effect it may not matter exactly how much you spent on the items/labour etc. The quantity surveyor will estimate the depreciation allowance based on the result, not your receipts. Now, I could be totally wrong (in which case please correct me). I need to make some phone calls tomorrow to check it out.

 

[AndrewT]

I just had a look in my Rental Property Taxation book (tony crompton) and it states:

Non-depreciable items:
- Kitchen Cupboards

This is the major cost in the whole renovation so I suppose my idea wouldn't work at all. Please post what you find out tomorrow. Interested in how it all pans out for you.

 

[wobbycarly]

You might also want to consider your appliances. If you want to/have to replace the appliances, will they fit, both physically and style-wise?

My understanding for kitchens regarding depreciation is that the cabinet works are building (2.5% pa) and appliances will have varied useful lifespans (eg, oven 10 years, DW 7.5, etc)*.

And when we got the schedule done on our last reno, we gave copies of all the receipts to the surveyor - hope they used them!


*I made those numbers up - don't use them!!

 

[artlez]

I was actually thinking of doing a similar thing to my recently purchased place. That is, I was just going to replace the cupboard/drawer doors for about $70 each, add new handles, new tap and leave it at that. I believe those 3 things add the most wow factor in a kitchen. I left out the benchtop as I don't think it needs upgrading just yet. A massive plus side to this is that it's extremely simple to install yet reaps the main benefits of a reno'ed kitchen.

In regards to depreciation as I understand it, it is beneficial for you to upgrade it in bits so it is classified as a repair instead of a renovation/improvement. Renos are depreciated over several years so it's obviously not as good as a straight up deduction of a repair. That's where I think upgrading small items such as doors and handles could count as repairs. Anyway I may be wrong with this so please feel free to correct me.

 

[Skeetaboat]

Andrew - will definitely keep you posted when I find out more info. If kitchen cupboards are non-depreciable, does that mean they are a straight up deduction?

Wobblycarly - yes, definitely something to consider. We're likley to stick with the same dimensions for replacement appliances but want to make space for a washing machine so we need to give this more thought.

Arletz - it's all well and good upgrading in bits and pieces, but how do you do that with tenants in place? I agree, I think it's a much easier job to replace cupboard doors than to rip out a whole kitchen and start from scratch. I would be interested to hear how you end up depreciating this.

Thanks for replying.

 

[schweedy]

I have done both in the past.

Currently I am doing a reno and ripped the whole kitchen out, horse hair plaster and wood panelling to boot (also did the laundry, toilet and bathroom), and putting in a flatpak from bunnings. Depending on how much work you intend to do on your own, as to what might be best for now (not to mention your tax angle). I have a handyman doing a lot of work for me, and with the cost of all the kitchen bits, and then his labour etc, not sure that it wouldnt be cheaper to pay a kitchen mob to come and do the job, not to mention a hell of a lot quicker.

I have also replaced just the benchtops in an oldish kitchen in Noble Park. The smaller sized cupboards meant I had to get the bench tops custom made, but Noble kitchens did a great job and for what I consider a reasonable cost.

My only concern is with the doors and how easy it would be to replace them?? I know a lot of the older kitchens cant be 'upgraded' as such, so you might need to look into that a bit more too.

 

[rroodd]

Hi guys, I am facing a similar 'kitchen overhaul' in one of my older houses at the moment - was thinking of replacing complete cupboards/bench assembly with a 2nd hand/ ex display setup - not sure then whether this would be classed as 'repairs' as it won't be a 'new' kitchen, so to speak....

How do you all get on regarding the 'incoveniencing' of your tenants, while your work is going on..?
I would think most existing (ie. 'in place') tenants would want to co-operate, as they know they will be getting something nice out of it...

 

[schweedy]

I am only getting my kitchen (and the rest) done now because our last tenants had agreed to moving in before the kitchen was done, and having it done at their convenience. Needless to say, it took 18 months for them to move on before we could get anything done on the place.

I have only ever done major renovations between tenants.

 

[wobbycarly]

Hi guys, I am facing a similar 'kitchen overhaul' in one of my older houses at the moment - was thinking of replacing complete cupboards/bench assembly with a 2nd hand/ ex display setup - not sure then whether this would be classed as 'repairs' as it won't be a 'new' kitchen, so to speak....

How do you all get on regarding the 'incoveniencing' of your tenants, while your work is going on..?
I would think most existing (ie. 'in place') tenants would want to co-operate, as they know they will be getting something nice out of it...

The definition of a repair according to the ATO is to bring an item back to the state it was. Repairs are deductible, improvements are depreciable. Another classification is if the works result in a better product that what was there to start with, then it's not a repair, but an improvement.

eg 1. Laserlite roof gets a hole in it. Decide to replace with colorbond. Result: improvement

eg 2. Large section of picket fence gets blown down in a storm. Replace the section with like materials. Result: repair.

So I'd say you're still doing an improvement with your kitchen. The fact that it's a 2nd hand kitchen doesn't make a difference to the classification. Given that you're (apparently) replacing so much of it, and particularly if it's still currently usable, then it's still should be considered an improvement.

Even the idea of replacing the handles, cupboards, benchtops separately wouldn't really help in classifying the works as repairs. All it would mean is that with smaller separate claims there may be less likelihood that it would raise alarms with the ATO for an audit.

Have a look here: http://www.ato.gov.au/individuals/content.asp?doc=/content/00183233.htm

Just my 2c worth...

 

[Ol School Skata]

i'm also about to do a cosmetic reno on a house and the kitchen is one area i am looking at. It is a mid 90's house so kitchen is a bit old and dated, but i believe it is structurally sound.

I'm considering either:
a) using cabinet makers for whole new kitchen
b) flatpax model from Bunnings/Ikea
c) thermoglaze existing kitchen

Have an inspection date comin up soon so should have a better understanding of costs then.

I'll update after this to share my research.

OSS

 

[The Donners]

Hi there seasoned renovators!

We're about to start our first major renovation and just wondering what are your opinions/experiences on completely ripping out old kitchen and putting in a new flatpack kitchen, compared to keeping existing framework and putting on a new benchtop, cupboard doors and drawers, plus replacing the tiles and appliances?

Is there much saving to be made in keeping the framework?

I think it would save in plastering and patching, rubbish removal, labour, and overall cost. Hubby thinks its better not to fiddle around with measurements and possibly cabinet makers and buy a flatpack from bunnings which we can install ourselves.

The house is 40 years old but in good condition, just very, very outdated.

What do you think?

Have you thought of painting the existing cupboards with a laminate paint (e.g. White Knight)? Gives a new finish for < $100. You could also have a custom benchtop cut and measured for under $500 - we did. Just remove the old benchtop and take it to a cabinet maker who will measure it up, we used a mob in Bayswater. PM me if you want the details.

 

[Ana]

It also depends on what you plan to do with the property, if you are planning on renting it out than you probably want to try and just neaten and freshen it up at least amount of cost to you, but if you are looking to resell (depending on the price range of properties in that area) you might be better off getting a new kitchen. It will always look better than when it's a mixture of new and old.

Wishing you every success, Ana

 

[Skeetaboat]

I have done both in the past.

Currently I am doing a reno and ripped the whole kitchen out, horse hair plaster and wood panelling to boot (also did the laundry, toilet and bathroom), and putting in a flatpak from bunnings. Depending on how much work you intend to do on your own, as to what might be best for now (not to mention your tax angle). I have a handyman doing a lot of work for me, and with the cost of all the kitchen bits, and then his labour etc, not sure that it wouldnt be cheaper to pay a kitchen mob to come and do the job, not to mention a hell of a lot quicker.

I have also replaced just the benchtops in an oldish kitchen in Noble Park. The smaller sized cupboards meant I had to get the bench tops custom made, but Noble kitchens did a great job and for what I consider a reasonable cost.

My only concern is with the doors and how easy it would be to replace them?? I know a lot of the older kitchens cant be 'upgraded' as such, so you might need to look into that a bit more too.

How much did each cost in the end schweedy? (if you don't mind sharing)..

 

[Skeetaboat]

Well in part thanks to everyone's thoughts and feedback and some good advice from Scott (Depreciator) over the phone, we're going to hold off on the reno (maybe just a freshen up as per The Donners suggestion), and renovate down the track closer to when we decide to sell. No point putting in a brand new kitchen if we're just going to hold the property for 5-10 years - it will start to date by the time we want to capitalise.

Andrew - what Scott advised (please correct me if I'm wrong Scott), is that most of the renovations depreciate at the same rate as building depreciation - that is 2.5% per year over a period of 40 years (excluding appliances which depreciate quickly). So $15,000 worth of improvements = $375 deduction. Plus maybe $600 for appliances. Not much. Certainly not enough for me to think it's worthwhile at this stage, especially as we're not in an area that is likely to command bigger bucks in rent for a nicely renovated place.

Another thing Scott alerted me to, being a new IP for us, we're better off waiting until we've had tenants in before upgrading the appliances because then we can write off the cost of the old ones. Anyway, hope that helps you a little.

We are considering polishing the boards before tenants go in. But if we hold off until after we've used the place to generate income, we could the write off the old carpet which would offset the cost of polishing. Does anyone know how much you can write off old carpet for?