Deprection Inspections – Do You Always Need One?
The COVID-19 pandemic has forced many businesses to reflect on “industry norms” and the way they operate. We are no exception.
Since the pandemic we have individually assessed 15,370 investment properties and have found that only 17.4%, actually needed an inspection in order to achieve the maximum depreciation. Learn more here.
Not EVERY property needs to be inspected in order for the maximum claim to be achieved.
So NOW you can only claim depreciation on the structure of the building like concrete and bricks for 2nd hand properties.
If you BUY brand new items like carpet and blinds, you can still claim depreciation but it must be based upon the purchase price (not an estimate).
In the OLD days, we used to visit the property so we can value these items individually, the ATO put a stop to that.
Our Commitment to Property Investors Moving Forward
Here are 5 reasons why SOME properties do not require a Depreciation Inspection:
- Extensive Database – In 40 years we have amassed an extensive database of construction costs for the majority of residential and commercial buildings around Australia.
- We have the costs – We are familiar with your building and as such, we already have the construction costs on file.
- Plant & Equipment no more – You have purchased a second-hand property so you cannot claim on the existing plant and equipment components.
- Online data – There is an abundance of detailed information and pictures of your specific property available online (both publicly and via subscription-based industry databases).
- You have the costs – Your property is a brand new build and you have access to the construction cost, plans and inclusions list.
Here are 5 reasons why SOME properties STILL NEED a Depreciation Inspection:
- Your property is unique – Your property is classed as High Spec/Luxury/Non-Standard and therefore not typical. An inspection will ensure the maximum deductions by ensuing all facets of your property are assessed and included.
- Non-residential – This means you can still claim the full benefits of depreciation including the Plant & Equipment (carpets, blinds, etc.)
- Renovated – Your property has been substantially renovated. There is insufficient information online and as such an inspection is necessary to maximise the depreciation.
- More information required – We do not have access to sufficient information specific to your property. We, therefore, need to acquire this via an onsite assessment.
- Plant & Equipment – Your property qualifies to claim Plant & Equipment deductions, an inspection ensures no assets are missed, which means your deductions are maximised.
The Australian Institute of Quantity Surveyors CEO, Grant Warner, has confirmed the following in writing to Washington Brown:
“I would like to confirm that AIQS (or the legal advice we sought) makes no representations about:
- how tax depreciation reports must be prepared by Quantity Surveyors;
- what Quantity Surveyors are able to estimate;
- whether original or newly appointed Quantity Surveyors are best equipped to estimate certain construction costs; or
- physical inspections being necessary to complete a tax depreciation report.
Grant Warner, CEO, The Australian Institute of Quantity Surveyors.”