Should I get a depreciation schedule?

[Keifer]

I bought a house in Victoria in 2007. The house is ten years old this year and I have not lived in the house since 2010. I have spent next to nothing on the house, so no renovations or any improvements have been made.

My question is how will a tax depreciation schedule help me? and is it too late to get one done? basically is it worth my while doing one before June 30?

Thanks

 

[D.T.]

Of course

 

[Brady]

Not too late. Get one. If you search this forum you will find everytime question is asked it's a yes.

 

[Peter_Tersteeg]

I've yet to see a depreciation report that didn't pay for itself, regardless of the age of the property. The house is only 10 years old. There's still a lot of building depreciation to be enjoyed.

 

[Jamie M]

Yes, definitely get a schedule written up. Your property isn't very old - you should be able to claim a fair bit.

I'm with Pete - I haven't seen a schedule that hasn't paid for itself.

Cheers

Jamie

 

[wategos]

What if a house was 30 years old with no capital expenditure on it since purchase, depreciation report still worth it? I've always assumed not & don't claim any depreciation.

 

[D.T.]

What if a house was 30 years old with no capital expenditure on it since purchase, depreciation report still worth it? I've always assumed not & don't claim any depreciation.

Perhaps not but still worth a go. My qs went out to one of my places and didnt charge me anything as couldn't find any worthwhile claims

 

[nhg]

What if a house was 30 years old with no capital expenditure on it since purchase, depreciation report still worth it? I've always assumed not & don't claim any depreciation.

Of course it is.

I did one on my 50 year old house with no works done. Still more than worth it. All the work it took was one phone call and making a relatively miniscule tax deductible payment.

I use Depreciators and am a fan of Scotts work ethic.

Other mobs would be BMT and Washington Brown.

Do NOT go cheap. Of the very few friends who get depreciation schedules done, a lot use other mobs because they 'are so cheap and how much difference could it make'. Thousands is what I found.

 

[Paul@PFI]

Yes. If the IP has been rented make sure that the schedule allows you to amend your 2012 and 2013 year tax returns to claim the new deductions. Make sure your QS knows you intend to amend to avoid all doubt.

There is a two year amendment period based on the date of the assessment notice. If you used a tax agent its possible if you RUSH that three years could be amended. (Check date of your '11 assesst)...A tax agent can do online in seconds.

For example if QS find $5,000 of annual dedns you may amend to claim deductions of $10,000 over the two years - You have to amend each year. At an average tax rate of say 38% this could refund $3800. Within two weeks.

$700 for schedule v's $3800? in immediate refunds...Well worth doing. Maybe even more.

One of the first things I do for new tax clients is review if they could benefit. A depreciation schedule for even one year is often a benefit. Automatic that we backdate and amend. The amendment benefit pays for the schedule and the minor tax fees and there is still $$$ to spare. Often a lot to spare. Then the additional benefit in each and every further year = improved refunds.

 

[srini]

Definitely get one. I'd recommend Depreciator and have used them a few times. I believe they also offer a discount if you mention the forum. Not sure if that is still the case.

 

[Brady]

What if a house was 30 years old with no capital expenditure on it since purchase, depreciation report still worth it? I've always assumed not & don't claim any depreciation.

My Elizabeth East property is >30 years old still get decent depreciation well over the cost of the report.

 

[bez23]

My Elizabeth East property is >30 years old still get decent depreciation well over the cost of the report.

Hey Brady,

Just curious how long it took to pay back the depreciation cost.

 

[Brady]

Hey Brady,

Just curious how long it took to pay back the depreciation cost.

1st year had $1592 of depreciation

 

[Paul@PFI]

I have a clients schedules in front of me. They have acquired 20+ properties. They have a schedule for each property they own. The WORST schedule gave deductions of $8,000 over its first three years. The best schedule equates to $17,000 over three years. In the later years the worst property will still get $900 pa deductions for 30+ years.

Total deductions on all schedules over 10 years exceeds $300,000. At a tax rate of 35% thats worth $100K in cash refunds against other income.

There is ONE situation when a depreciation report isnt really much use. A SMSF paying pensions since the tax rate is zero.

 

[Coconutwheels]

I can't believe your accountant hasn't insisted on getting one for a 10 year old house!

 

[depreciator]

I can't believe your accountant hasn't insisted on getting one for a 10 year old house!

A few years ago, we had an accountant send us requests for several dozen Dep Schedules for several dozen clients. I was curious about what was going on, so I called him. He had recently bought another accounting practice and when they were going through the client files he noticed that no clients had Dep Schedules.