Homes built 1986 to 1987

[Lee Jackson]

Hi Guys,

I have been given a challenge and was hoping you guys might be able to help me. According to my friend for those years that a property was built you can claim 4% depreciation. So he has challenged me to find areas where properties were being built around that time.

I thought this would be a great place to start the search.

Thanks for any help in advance.

Lee

 

[duncan_m]

Hi Guys,

I have been given a challenge and was hoping you guys might be able to help me. According to my friend for those years that a property was built you can claim 4% depreciation. So he has challenged me to find areas where properties were being built around that time.

I thought this would be a great place to start the search.

Thanks for any help in advance.

Lee

http://www.ato.gov.au/print.asp?doc=/content/57273.htm

" 22 August 1984 to 15 September 1987 4%"

 

[depreciator]

For residential it's July 85 till September 87.

You need to bear in mind that properties built during this 26 month window don't have much left to claim on the building. At 4%pa x 25 years they'll be finished in 2010-12.

An 88 constructed building, though, will keep depreciating at 2.5% till 2028.

That 88 building has lots more to claim than an 86 building. This is relevant to people who intent buying and holding.

Scott

 

[MarkB]

That 88 building has lots more to claim than an 86 building. This is relevant to people who intent buying and holding.

A home built in April 1986 has a maximum of 20% of the estimated build cost left in claimable depreciation (100% - (20 x 4%) = 20%).

On the other hand a building constructed in April 1988 has 55% left (100% - (18 x 2.5%) = 55%).


Mark

ps. Edited so I didn't look like a dill owing to Depreciators very good post.

 

[Lee Jackson]

You guys are amazing with the numbers.

In relation to buying etc One thing you have to remember here is that it was a challenge for me to find these areas and not for any other reason. So the question remains where would you go to find where the developments were around that time.

Lee

 

[MarkB]

Could you contact the titles office and see if they can point you in the directions of land titles issued from 1 July 1984 to 31 December 1986?

I've allowed an arbitrary lag for build times.

Mark

 

[Lee Jackson]

Hey Mark,

Great Idea. Now where cookin.

I must say thank you guys for the quick response times. You guys Rock.

Lee

 

[Ajax]

Given Pitt Street's comments above I'd be targeting (and have targeted) more recently constructed buildings.

(1) The period of time over which you can claim capital works allowance at 2.5% on a house constructed in say the last 7 years is far longer than for a house constructed say in 1989.

(2) The building costs for a more recently constructed house would be higher (resulting in the ability to claim more capital works allowance).

I was very pleased when I saw the capital works allowance/depreciation schedule for my Darwin property (where construction was completed in 1999)

I also note from Australian Master Tax guide examples that if you have a house where construction was completed on or after 16 September 1987 however the contract for the construction was signed pre 16 September 1987 (ie. a contract signed on 10 September 1987) the relevant deduction rate is 4%. The building contract date determines whether the 2.5% or 4% capital works deduction applies.


Ajax

 

[geoffw]

Don't forget either, apart from what others have said, that the base building prices have gone up substantially since 1987. 4% of a building built in 1986 is probably worth half of 2.5% of a building built this year (I've assumed doubling of building costs every 10 years- this may not be correct- but you get the idea).

 

[emu]

The challenge?

Rowville
Endevour Hills
Patterson Lakes
Chelsea
Craigeburn
Melton
Diamond Creek

It's a start, i can remember looking through display homes at the time( back when i was in my last days of being single )

 

[emu]

While we are on the subject of depreciation i am interested in knowing what the difference in building depreciation would be from the below example.

I am currently looking at new 3 brm townhouses between carrum - frankston or established 3brm around Mt Waverley.

Carrum -------------- Mt Waverley
Built 06 ------------- Built?/Reno 98, kitchen, bathroom, average reno?)
Land value 250k-------Land value 290k
Cost 400k ------------Cost 400k

The reason i ask is that my current IP's were built before 1970, so i only claim fittings etc.
This next IP will kill my serviceability for a while( a drawback from chasing CG) so any help would be appreciated.

Thanks
Ken

 

[WashingtonBrown]

There are a few ways to claim a 4% Bld allowance...

If thats what you are after!

Please read my article titled

"How to claim a 4% building allowance and get away with it!"

You can download it here

http://www.washingtonbrown.com.au/news.htm

Hope it helps.

Regards

 

[skater]

In NSW, I remember looking at new houses in Ambarvale near Campbelltown, & St Clair near Mt Druitt at around that time.