Is it worth getting a depreciation report for one year?

[spectator]

Hi there,

We bought a house as an IP just over a year ago but will be moving in at end of lease. I was wondering whether it would be worth getting a depreciation report done given it will be rented for such a short period of time. Details are as follows:

4 bedroom place built early 1985 but had some work done by previous owners (who lived there for 4 years)

New tiling in bathroom, family room, study
New light fittings throughout
2 new air conditioners
Ensuite added
Rumpus added by shortening Garage (no external construction). New carpet in that room but nowhere else
Retaining walls outside
2 New toilets
Main bathroom redone

cheers
Rob

 

[Neil Richardson]

Hi Rob

You won't be able to claim anything on the costs of the house given it started (just) before 18/7/85. But with the renos you describe plus the plant items, you should come out ahead even with a claim of just one year.

You may not be much ahead, but might be better than nothing.

As long as you get $1 back it beats giving it to the taxman !!

 

[spectator]

Thanks Neil

As long as you get $1 back it beats giving it to the taxman !!

True enough, but I'm not sure I'd want to hassle the tenants with an access request for $1 and I don't want to delay my tax refund by waiting until we move in.

Hmmm ... decisions

 

[Belu]

call up some of the depreciation companies. if there isnt anything structual you may be able to arrange something a bit cheaper where you fill out a form and take a bunch of photos. tie this isnt a property inspection and you don't have any extra burden on the tenants.

this could help drastically reduce the cost and give you the depreciables. have a look at this link:

http://www.houseofwealth.com.au/tools.php

click the 2nd tool and have a go on the depreciation schedule. not sure if BMT do the above but give them and others a call if it appeals to you.

Say it costs $500, get $3000 deductions in the year and you're on 31.5% tax=

$3,500 * (30% tax + 1.5% medicare) = $1,100 return for a $500 outlay.

might get more, might cost less, dont know. give them a buzz though, you never know

 

[depreciator]

I'd be waiting till you move in there before doing anything.

 

[spectator]

We will be renting out our current house and need to get one done for here so we could probably show some photos and get an idea at that time about whether it is likely to be worth getting done.

thanks

 

[Ms Jade]

I believe BMT still guarantee deductions in year 1 will be at least double their fee or you get your $ back. We are renting out a place for a year as well & it's pre-1985 so I did wonder.... Schedule came in with over $8000 of deductions. I would be making that call if I were you.

 

[spectator]

Hi,

Thanks for all the advice. I know it is while ago now but thought I would post back to benefit those in a similar situation. We had the depreciation schedule done last week and it has been well worthwhile with $7000+ of deductions for the 1st year (plus some for July and most of August this year).

cheers
Rob

 

[+Mpire_Builder+]

Hi there,

We bought a house as an IP just over a year ago but will be moving in at end of lease. I was wondering whether it would be worth getting a depreciation report done given it will be rented for such a short period of time. Details are as follows:

4 bedroom place built early 1985 but had some work done by previous owners (who lived there for 4 years)

New tiling in bathroom, family room, study
New light fittings throughout
2 new air conditioners
Ensuite added
Rumpus added by shortening Garage (no external construction). New carpet in that room but nowhere else
Retaining walls outside
2 New toilets
Main bathroom redone

cheers
Rob

Keeping it short.

We refer our clients to a building inspector / surveyor. Average reports cost $440. So you can claim the report as a tax deduction,( so you will get your marginal tax rate on the dollar back). and based on items listed air-con especially, you will come out ahead, even if for one year.

Dave