Unhappy with Quantity Surveyor valuations of fixtures

[GreenGoblin]

Hi all

We purchased a 10 y.o. house as a resi IP a little over a year ago. Earlier this year we engaged a Quantity Surveyor (QS) to do a depreciation schedule as we were between tenants. When we met with our accountant this week he pointed out o I know, I really should have looked more closely) that the fixtures and fittings hadn't been valued sensibly (in our opinion).

The QS had estimated the original cost of the fixtures and fittings as at (the year) 2000 and then depreciated them to our settlement date, leaving the residual balance as the current value we could start depreciating. As an example, curtains valued at say $1000 in 2000 have had $990 'depreciated' over the past 10 years and are now valued at $10 . An alarm system valued at $1200 in 2000 has had $1195 'depreciated' and is now valued at $5 (which we can claim over the next 6 years )

Surely a working alarm system (even if 10 y.o.) is worth more than $5 today! Speaking to two other QS firms today, they advise that they value the items at settlement date and factor in the property purchase price.

1. Is our QS valuation of our fixtures and fittings correct?
2. If not, any suggestions on getting them to revise their valuations?

(FWIW, the QS is recommended by some on this forum, is a member of the Australian Institute of QS, and isn't Depreciator (though probably should have been!)

Thanks in advance,
Green Goblin

 

[depreciator]

Phew.

My heart always sinks when I see the title of some of these threads.

Assets (fixtures and fittings) do need to be written down to arrive at a value for when the Depreciation Schedule kicks off. If you had owned the property for 10 years and only just started renting it out, the Assets may not be worth much now. Maybe there was some confusion about when you bought the property?

According to the ATO, taxpayers can estimate the value of Assets themselves. Your accountant would assist. Or just give me a call and I'll tell you what to do. I'm in the office most of this week.

Don't publically name the other company - that sort of thing always ends in tears.

Scott

 

[GreenGoblin]

Just an update - I rang Scott at Depreciator and he very kindly spent around 20 minutes on the phone with me, listening to my story, providing a sympathetic shoulder and then giving me some very good advice. In a nutshell, he suggested taking the original values estimated by the QS for the fixtures and writing their present-day values by 30 to 40%. Scott suggested I run this past my accountant, who thought this was a good idea too.

I really appreciated Scott's time, understanding and sensible advice, but what I most appreciated was that Scott spent 20 minutes giving me good advice when I'd used another QS company, not his.

Kudos to Scott - I'd certainly recommend using Depreciator if you need to get a depreciation report prepared.

A much happier Green Goblin!