IP depreciation question

Discussion in 'Accounting and Tax' started by Kokee, 21st Jun, 2015.

  1. Kokee

    Kokee Member

    Joined:
    1st Dec, 2014
    Messages:
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    Location:
    New South Wales
    Hi SSers,

    I've recently purchased an investment property. It's been leased since 4/6/2015.
    I am thinking to get depreciation report for it. I've been told that i can only claim:

    1-cost of the report itself
    2-depreciation for the duration 4/6/2015 (first day of lease) to 30/6/2015 (end of FY)

    Regarding 2, would there have been much depreciation occurred in 3 weeks that could cover cost of report itself ?

    For example: if for whole year, the depreciation amount is $3k, for 1 month it would be $3k/12=$250 (not much ???). Is it how this works ?

    It's pre 1985 built house but renovated completely.

    Please respond so that i can quickly make up my mind and arrange depreciation schedule.

    Thanks a lot in advance !!!
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

    Joined:
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    Melbourne
    Is the property going to be leased after the 30/6/2015? A depreciation report doesn't just apply to what you can claim this year, but what you can claim for potentially the next 40 years. Whilst it's a good idea to get new reports after a renovation or other changes to the property, you don't need a new report every year.

    If the property is only going to be leased for a few months you probably wouldn't bother with a report, but if it's an investment property on an ongoing basis, it's worth it. Personally I've never heard of a report not paying for itself several times over, with the renovations it's definitely a good idea to get a report done.
     
  3. Kokee

    Kokee Member

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    1st Dec, 2014
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    Location:
    New South Wales
    Yes

    Wao - didn't know that :)

    It's an investment property on an ongoing basis. I am going to get depreciation schedule arranged this week !!!!

    Thanks Peter for the quick reply. That's the reason i love this forum where you get quick informative replies. Believe me i wasted too much time on google and tax agent wasn't clearly answering my queries :/
     
  4. BMT Tax Depreciation

    BMT Tax Depreciation Member

    Joined:
    21st Mar, 2012
    Messages:
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    Location:
    Sydney, NSW
    Hi Kokee,

    Read the article: "Claim $4,852 in Twenty-nine Days"

    http://www.bmtqs.com.au/Documents/publications/mav32.pdf

    For your first partial financial year claim, the amount you claim won't be proportional to the length of the period of the year it has been rented out. This is because items that start off with a low value (under $300) can be written off immediately. Other items of a sub-$1000 can have their depreciation acclerated in a low value pool.

    As has been pointed out already, you're going to need a schedule anyway and these deductions (perhaps not necessarily $4852 but you never know!) will be claimable regardless of when you get one. If you wait at this stage, not only will you have to wait to claim your fee but you'll have to amend your 2015 return to get those deductions back.
     
  5. Kokee

    Kokee Member

    Joined:
    1st Dec, 2014
    Messages:
    26
    Location:
    New South Wales
    Thanks Chris for your reply.

    I've contacted BMT and i got discounted quote of $705 (referred by H&R block tax agents) :)