If you have a pre 85 built property with no renos and not many Assets, there might be $1,000 depreciation in the first full year, but I'm not sure it would be worth paying $6-700 for a Depreciation Schedule. Remember, when it comes to just Assets, a taxpayer can value them - the ATO's contention is that it requires no particular expertise to value, say an old stove. Give me a call Monday if you want me to explain this.
Anybody doing Depreciation Schedules should work out before they go there if it is going to be worth it for you. Lots of clients send us photos of properties and I get one of our guys to work out what might be the possible depreciation return before we take on the job. There are times when we turn down jobs.
Lots of companies don't send quantity surveyors to properties, either. I don't think that is ideal, but they tend to be cheaper.
If you have a pre 85 built property with no renos and not many Assets, there might be $1,000 depreciation in the first full year, but I'm not sure it would be worth paying $6-700 for a Depreciation Schedule.
Just to explain what they mean by this is that you can only write off the 'building' component (which is the biggest component) if it was built from 18 July 85 onwards. BUT if it was built between that date and 15 Sept 87, then it is written off over 25 years (4% p/a) so is almost all used up now anyway. After 15 Sept 87 it is written off over 40 years (2.5% p/a) so in that instance it would definately be worthwhile getting a Quantity Surveyor involved.
If it was built before the 1987 date and it hasn't been renovated since then by a previous owner, then I agree that it's best to calculate the value of 'depreciable items' such as carpet & appliances yourself. You should check out this link on the ATO's website which lists the typical 'Residential' depreciable items. http://www.ato.gov.au/print.asp?doc=/content/46259.htm It is an older link, but they haven't reassessed this list since 2004 so it saves you looking through the latest list in TR 2010/2 which is 172 pages long.
Our experience - we bought a unit in Februaryh, which was built in the late 90's. We paid $600 for a depreciation report, and our depreciation and capital allowance deduction for the first year is about $2000.
The saving in tax at 30%, is $600 (2000 x 0.3), so the report has paid for itself in the first year.
Thanks Scott but it was more of a rant about my of lack understanding of the calculations rather than a rant about poor service by a cetain QS. I spoke to Hans today and all is sorted now I understand where the figures come from and once I had taken "non deductible" costs into account. Another happy customer.
Since we bought the property (built ~1975) we have not carried out any renos. We know that the kitchen and bathroom or only about 5 years old but we have no receipts or proof of this. Would depreciation still be applicable do you think? and would we be able to calculate the depreciation ourselves on kitchen appliances or seeing as we do not have receipts we cannot?
I presume the kitchen and bathroom were renovated by the previous owner? If so, you'd need to get a quantity surveyor to come out to inspect the works and they would value those works and any other works that you may be able to claim (like painting, etc). Would be worthwhile getting this done as the deductions you'd get would be a reasonable amount.