| Property Depreciation Explained. |
| Any property that is rented or used for income producing purposes is eligible to be depreciated. |
The benefit of this is that a portion of the capital that has probably maintained its value can be claimed as an income tax deduction.
How do we determine the amount that can be claimed?
The contract of purchase of the property might include the necessary details, but since stamp duty became payable on chattels several years ago, few contracts bother with these details now. Even if they do, they may not be accurate. The best solution is to engage a professional within the construction industry who has the relevant qualifications to estimate the cost of building components and meet the experience criteria of the Australian Taxation Office. We can help provide a number of experts capable of providing the necessary reports. A fee of $350 for a small property to $650 for a commercial building is probably a starting point.
A typical townhouse (in Sydney) of $300,000 is likely to have depreciation deduction of $25,000 over years one to five according to one quantity surveyor. As an aside, he also says that it could be 10% to 35% more expensive to build in Melbourne. (Remember the land in Sydney will probably cost significantly more than Melbourne, etc).
If you do have an income producing building, then the quantity surveyors fee will be well worth the cost.
5th-March-2004 |
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