How To Get Depreciation Schedule and Report On Your Investment Property
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FREQUENTLY ASKED QUESTIONS ABOUT DEPRECIATION
What are the steps involved in arranging a depreciation schedule through Write It Off?
In order to complete a Depreciation Schedule for your investment property Write It Off will firstly assess your property by means of a detailed property inspection.
We are happy to arrange this inspection through the managing agent for the property or directly with you or your tenants.
Once the inspection is complete, we conduct a search on your building file and request the following information from you:
In order to complete a Depreciation Schedule for your investment property Write It Off will firstly assess your property by means of a detailed property inspection.
We are happy to arrange this inspection through the managing agent for the property or directly with you or your tenants.
Once the inspection is complete, we conduct a search on your building file and request the following information from you:
- Purchase (settlement) date and the date the property became ‘available for rent’
- Cost and purchase date of any item you have purchased since owning the property
- Construction Cost information (where applicable)
- Your authority to inspect the building file for the property
What are the benefits of a depreciation schedule from Write It Off?
The Write It Off Depreciation Schedule addresses both the construction cost and plant and equipment elements of depreciation thus providing a clear and complete picture of the depreciation available to you out of your investment property.
The Write It Off Depreciation Schedule addresses both the construction cost and plant and equipment elements of depreciation thus providing a clear and complete picture of the depreciation available to you out of your investment property.
What type of report will you receive?
You will receive a hard copy document that contains all the information you will need to complete your tax return. It includes details
of all assets we identified for depreciation, original construction cost, Plant & Equipment as well as any capital costs incurred over the life of the property. The report is calculated over the next 20 years from the date available for rent and provided in two methods-
Prime Cost & Diminishing Value. At the back of each method is a summary page with a total figure for each year for the next 20 years that clearly states what the total depreciation claim is for that year.
of all assets we identified for depreciation, original construction cost, Plant & Equipment as well as any capital costs incurred over the life of the property. The report is calculated over the next 20 years from the date available for rent and provided in two methods-
Prime Cost & Diminishing Value. At the back of each method is a summary page with a total figure for each year for the next 20 years that clearly states what the total depreciation claim is for that year.
We prepare and present the schedule in an easy to read format making it easy for your Accountant or Tax Adviser to use when preparing your tax return. An electronic version of our report can be sent to either you or accountant if needed. Additional hard copies attract a small fee.
How much depreciation am I likely to get out of my property?
This question is very hard to answer because every property is different from when it was built to what has happened to the property over its life so far. However after completely thousands and thousands of depreciation reports we have compiled quite a large database of depreciation claims for investment property owners. Below is an average of what our clients have received in the past depending on the year in which it was built and whether a house or unit. Please note that this table is indicative only and cannot be accurately relied upon. This is an ‘estimate’ based on past history and can no way accurately predict what your property will achieve in depreciation. It could be higher, it could be lower!!!
This question is very hard to answer because every property is different from when it was built to what has happened to the property over its life so far. However after completely thousands and thousands of depreciation reports we have compiled quite a large database of depreciation claims for investment property owners. Below is an average of what our clients have received in the past depending on the year in which it was built and whether a house or unit. Please note that this table is indicative only and cannot be accurately relied upon. This is an ‘estimate’ based on past history and can no way accurately predict what your property will achieve in depreciation. It could be higher, it could be lower!!!
| Expected Depreciation for a House | ||||
|---|---|---|---|---|
| Year | Plant & Equipment Depreciation | LVP Depreciation | Capital Works Depreciation | Total Depreciation |
| 1985 | $2,112 | $1,832 | $1,614 | $5,558 |
| 1986 | $2,169 | $1,863 | $2,319 | $6,351 |
| 1987 | $2,228 | $1,894 | $2,416 | $6,539 |
| 1988 | $2,288 | $1,927 | $2,518 | $6,732 |
| 1989 | $2,350 | $1,959 | $2,624 | $6,933 |
| 1990 | $2,413 | $1,993 | $2,734 | $7,140 |
| 1991 | $2,478 | $2,027 | $2,749 | $7,353 |
| 1992 | $2,545 | $2,061 | $2,968 | $7,574 |
| 1993 | $2,614 | $2,096 | $3,093 | $7,803 |
| 1994 | $2,684 | $2,132 | $3,223 | $8,039 |
| 1995 | $2,757 | $2,168 | $3,358 | $8,283 |
| 1996 | $2,831 | $2,205 | $3,499 | $8,535 |
| 1997 | $2,908 | $2,242 | $3,646 | $8,796 |
| 1998 | $2,986 | $2,280 | $3,799 | $9,066 |
| 1999 | $3,067 | $2,319 | $3,959 | $9,345 |
| 2000 | $3,150 | $2,359 | $4,125 | $9,634 |
| 2001 | $3,235 | $2,399 | $4,298 | $9,932 |
| 2002 | $3,322 | $2,439 | $4,479 | $10,241 |
| 2003 | $3,412 | $2,481 | $4,667 | $10,560 |
| 2004 | $3,504 | $2,523 | $4,863 | $10,890 |
| 2005 | $3,599 | $2,566 | $5,067 | $11,232 |
| 2006 | $3,696 | $2,610 | $5,280 | $11,586 |
| 2007 | $3,796 | $2,654 | $5,502 | $11,951 |
| 2008 | $3,898 | $2,699 | $5,733 | $12,330 |
| 2009 | $4,003 | $2,745 | $5,974 | $12,722 |
| 2010 | $4,111 | $2,792 | $6,225 | $13,128 |
| 2011 | $4,222 | $2,839 | $6,486 | $13,548 |
| Expected Depreciation for a Unit | ||||
| Year | Plant & Equipment Depreciation | LVP Depreciation | Capital Works Depreciation | Total Depreciation |
| 1985 | $1,213 | $1,391 | $444 | $3,048 |
| 1986 | $1,269 | $1,420 | $1,488 | $4,177 |
| 1987 | $1,328 | $1,450 | $1,564 | $4,341 |
| 1988 | $1,389 | $1,480 | $1,644 | $4,513 |
| 1989 | $1,452 | $1,511 | $1,727 | $4,691 |
| 1990 | $1,519 | $1,543 | $1,816 | $4,878 |
| 1991 | $1,589 | $1,576 | $1,908 | $5,073 |
| 1992 | $1,662 | $1,609 | $2,005 | $5,276 |
| 1993 | $1,739 | $1,642 | $2,108 | $5,489 |
| 1994 | $1,819 | $1,677 | $2,215 | $5,711 |
| 1995 | $1,902 | $1,712 | $2,328 | $5,943 |
| 1996 | $1,990 | $1,748 | $2,447 | $6,185 |
| 1997 | $2,081 | $1,785 | $2,572 | $6,438 |
| 1998 | $2,177 | $1,822 | $2,703 | $6,702 |
| 1999 | $2,277 | $1,861 | $2,841 | $6,979 |
| 2000 | $2,382 | $1,900 | $2,986 | $7,267 |
| 2001 | $2,492 | $1,940 | $3,138 | $7,569 |
| 2002 | $2,606 | $1,980 | $3,298 | $7,885 |
| 2003 | $2,726 | $2,022 | $3,466 | $8,214 |
| 2004 | $2,852 | $2,064 | $3,643 | $8,559 |
| 2005 | $2,983 | $2,108 | $3,829 | $8,919 |
| 2006 | $3,120 | $2,152 | $4,024 | $9,296 |
| 2007 | $3,263 | $2,197 | $4,229 | $9,690 |
| 2008 | $3,414 | $2,243 | $4,445 | $10,102 |
| 2009 | $3,571 | $2,290 | $4,672 | $10,533 |
| 2010 | $3,735 | $2,339 | $4,910 | $10,983 |
| 2011 | $3,907 | $2,388 | $5,160 | $11,454 |
Who benefits from a complete depreciation report?
Property investors use the depreciation schedule in calculating and forecasting potential cash flow gains available through maximising the taxation allowance available on their investment property.
Property investors use the depreciation schedule in calculating and forecasting potential cash flow gains available through maximising the taxation allowance available on their investment property.
Buyers of investment property refer to the depreciation information in estimating potential gains of their purchase.
Can depreciation be claimed on any investment property?
Certain cut off dates apply for depreciation claims relating to residential investment property.
Certain cut off dates apply for depreciation claims relating to residential investment property.
As a general rule any building, irrespective of age, may attract a
claim for depreciation of the plant and equipment items.
In order to depreciate the original construction or any subsequent
additions / renovations the property must meet the construction date
guidelines.
Is the cost of the depreciation schedule tax deductible?
Yes. The cost of obtaining an estimate of construction costs of a rental property by an appropriately qualified person is deductible in the year it is incurred.
Yes. The cost of obtaining an estimate of construction costs of a rental property by an appropriately qualified person is deductible in the year it is incurred.
Is it Worth getting a Depreciation Report done for an Older Property?
Many investors are unsure if it is worthwhile getting a depreciation report done on an older property. They worry about this when the property is older than the Capital Works deduction deadline of 18 July 1985. Prior to this date, residential property investors are unable to claim for the original cost of constructing the property. However they are forgetting 3 very important points that they need to consider.
Many investors are unsure if it is worthwhile getting a depreciation report done on an older property. They worry about this when the property is older than the Capital Works deduction deadline of 18 July 1985. Prior to this date, residential property investors are unable to claim for the original cost of constructing the property. However they are forgetting 3 very important points that they need to consider.
- There are 2 main parts to any depreciation calculation for investment properties. The first is the original capital works deduction that you can’t claim for a pre 1985 property but there is also Plant & Equipment deductions that you can claim. Tax law provides that new effective lives may be determined from an older property when a new owner purchases the property. This means that the plant and equipment that form part of the house can be re-valued and depreciated to the benefit of the new property owner.
- On top of the plant & equipment deductions available to you, almost all older properties have had some sort of renovation or upgrade done to them to improve the property. This could be a new kitchen, upgrade to the properties electrical or plumbing, a fresh paint job, a new pergola or even a complete refurbishment. All these sorts of upgrades and many many more can form part of the capital works deduction and make a significant difference to your depreciation claim.
- If you don’t get a report done then you can claim nothing for depreciation (except for new purchases where you hold a receipt) as your accountant or tax adviser is not legally able to calculate the value of any tax deductible items that forms part of your property. A firm such as Write It Off is legally qualified and experienced to maximise and calculate the depreciation deductions that are available to you.
What are some of the things
you can claim:
| Assets that fall under the banner of plant and equipment | |||
| Window furnishings | Carpets | Lino | Floating floors |
| Alarm Systems | Door closers | Lights | Hot water systems |
| Pumps | Heaters | Air conditioners | Doorbells |
| Fire Alarms | Fans | Furniture | Kitchen Appliances |
| Heat Lamps | Roller Door Motors | Laundry Appliances | Door Stops |
*This
list is not exhaustive and there are many other items that form part
of Plant & Equipment
What if I am still Unsure?
If you are still unsure then what about our guarantee! We will do the report for you even if you are not convinced that it is worthwhile. If we can’t get 2 times the cost of the report in the first full year of depreciation then we promise that we will do the report for free. So what have you got to lose, not only will you get to claim our fee as a tax deduction but also at least twice that fee again as another fully legitimate tax claim. If not you still get to claim some depreciation and it cost you nothing to get the report done.
If you are still unsure then what about our guarantee! We will do the report for you even if you are not convinced that it is worthwhile. If we can’t get 2 times the cost of the report in the first full year of depreciation then we promise that we will do the report for free. So what have you got to lose, not only will you get to claim our fee as a tax deduction but also at least twice that fee again as another fully legitimate tax claim. If not you still get to claim some depreciation and it cost you nothing to get the report done.
So
even if your property is 30, 50 or 100 years old it is nearly always
financially worthwhile getting a professional tax depreciation report
performed by Write It Off on your property.
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