|
Common property refers to the areas within an apartment complex or development that are shared between owners. In general, common areas are designated areas of a building or land that are available for use by all occupants, tenants or owners.
More complicated common areas exist whereby access to certain common areas is restricted by the entitlement the owner is granted over these areas.
Investors don’t often realise that common property areas and items can be claimed as a depreciation deduction. These are legitimate deductions and can be maximised by a specialist quantity surveyor.
How do common property entitlements increase the depreciation benefit?
Common property entitlements can add thousands of dollars to your tax depreciation claim each year, depending on the apartment complex or development. Larger complexes generally have more common property, increasing the depreciation claim. Common property is depreciated in the same way normal plant and equipment items and buildings are depreciated. Plant and equipment items (Division 40) in common property areas are depreciated according to their effective lives and the building (Division 43) is depreciated over 25 or 40 years, depending on when it was constructed.
A taxpayer’s interest in a common asset is considered an asset in its own right and is depreciated as such when considering immediate write off rulings. By claiming a percentage of the depreciation on common property, this adds to the current depreciation claim.
What is a unit owner’s entitlement to common property? How is it worked out?
A unit owner’s entitlement to common property correlates directly to their liability. Common property, in regards to depreciation, is apportioned depending on a number of things like the size of the unit, its position in the development (penthouse or ground floor unit) and even its view. When a land surveyor first draws up the plan for a development, they work out each unit owner’s entitlements.
How do BMT & ASSOC maximise your common property claim?
BMT & ASSOC conduct a thorough site inspection of common property areas and items taking photos and measurements, noting all depreciable items.
Based on relevant building plans, we determine the owner’s entitlements and depreciate all items according to that entitlement. BMT & ASSOC estimate all common plant and equipment items within the development and apportion them based on the owner’s entitlements.
It is a complex procedure that should be handled by a specialist quantity surveyor.
|
