» BMT Quantity Surveyors

The BMT process: who does what?

BMT team — Mon, 25 Sep 2023 22:45:13 +0000

Research shows that around 80 per cent of property investors are missing out on depreciation claims. If you’re one of those property investors, you could be missing out on thousands of dollars each financial year. Fortunately, arranging a BMT Tax Depreciation Schedule is simple and stress-free. BMT Tax Depreciation takes a comprehensive approach to preparing depreciation schedules for both residential and commercial property to ensure every deduction is maximised. In this article we will look at: An overview of the BMT process Quantity surveyors in the BMT process Property managers in the BMT process Accountants in the BMT process An overview of the BMT process The BMT process begins when you request a quote for a tax depreciation schedule. This can be done by phone or online. Once you’ve requested a quote, we’ll collect the basic information we need from you in one go and do some initial calculations to ensure the schedule is worthwhile. This includes simple details like: the name you would like to appear on the report the property address purchase information you property manager and accountant details. For residential investors, we can then contact your property manager or tenant to arrange access for a property inspection. Using their expertise, BMT site inspectors will thoroughly assess the capital works and plant and equipment assets found within your property. In the case of apartments or strata complexes, this includes all common property items where legislation allows. From there, our depreciation and tax specialist team will review the information gathered, do additional research to establish construction and purchase dates, check for any additional works and prepare your tax depreciation schedule. We can even forward your schedule to your accountant directly, saving you time. Given the 2017 legislation changes, it’s essential to contact a specialist quantity surveyor to assess your property. Both new and old residential investment properties have substantial depreciable value. On average, we find residential investors a first full financial year claim of almost $9,000. In commercial properties, both the owner and tenant can claim depreciation deductions. Our tax depreciation schedule can include separate reports where multiple entities or tenants control different assets or have different acquisition dates. All schedules for commercial property are prepared according to their particular industry. We’ve completed thousands of schedules for all commercial property types including agricultural industries, manufacturing, automotive and mechanical, industrial and warehouse, hospitals and medical centres. Using industry specific legislation, a specialist site inspector will assess your property to ensure every deduction is uncovered and maximised. This includes any fit-out installed or assets removed during an upgrade or renovation. When construction work or assets are removed from a property during its income production period, there is often remaining unclaimed depreciation that can be written off. BMT staff are experts at calculating this residual amount and will make the necessary adjustments to your schedule. Now that you have a good understanding of the BMT process, let’s look more closely at the specialists involved. Quantity surveyors in the BMT process Quantity surveyors are qualified professionals who specialise in building measurement and estimating the value of construction costs. They get involved at various stages throughout a buildings construction and use their skills to ascertain the costs of building works on any project. A specialist quantity surveyor: documents every qualifying asset in a property calculates their depreciable value to ensure that the investor maximises their deductions ensures full compliance with Australian Taxation Office (ATO) regulations, meaning all deductions are accurately evidenced in the event of an audit. To work as a quantity surveyor in Australia, you’re required to gain qualifications in quantity surveying or construction management by competing a university degree. You’re then required to do two years’ worth of logbook experience before undergoing a panel interview with the Australian Institute of Quantity Surveyors (AIQS) and the Royal Institution of Chartered Surveyors. When looking for a quantity surveyor, check that they use their own specialist staff rather than contractors for parts of the process. This is important in the evidence of an audit or if the ATO have any questions regarding the process. Another crucial thing to be aware of is referral fees. Ensure that there are no referral fees or kickbacks being paid. You want to use the best in the business, not the quantity surveyor who is paying the most. It’s also important to be aware that not all quantity surveyors specialise in tax depreciation. Only a tax depreciation specialist such as BMT can be relied on to maintain detailed knowledge of all current ATO Tax Rulings relating to depreciation. Property managers in the BMT process As a part of the BMT process, we will collect the necessary information on who to contact in order to arrange a site inspection. As properties need to be income producing before depreciation can be claimed, we’ll often need to speak with your property manager to arrange access to your investment property. We’re flexible with these arrangements to ensure minimal disruption to your tenant during this period. Working with your property manager allows for easy organisation, helps the tenant or tenants to understand why the site inspection is taking place and eliminates admin for you as the landlord. BMT also provides a number of services and tools to help inform property managers on depreciation benefits including New to Rent. New to Rent gives property managers complimentary depreciation estimates tailored to each rental property listed by their agency. The estimates highlight the difference depreciation can make to your cash flow and will help you to determine your after-tax position. Accountants in the BMT process Your accountant is often one of the last to find out about your investment property. This means there’s often a lot of last minute activity to be completed within a short timeframe to ensure that your claim is maximised at the end of each financial year. That’s where BMT can help. A BMT Tax Depreciation Schedule provides accountants with all the necessary information to lodge an accurate claim. We also provide access to MyBMT that […]

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Site inspections are a must for depreciation schedules

BMT team — Wed, 08 Apr 2020 23:55:11 +0000

In recent weeks, the Covid-19 pandemic has raised questions about the necessity of a site inspection when preparing a tax depreciation schedule. At BMT Tax Depreciation, we have always believed that having a thorough site inspection is essential to achieve the highest possible deductions, while maintaining full compliance with the Australian Taxation Office (ATO). This position is endorsed by the Australian Institute of Quantity Surveyors. Click here to read more. During this time of uncertainty, we want to assure you that we are taking every precaution to ensure the health, safety and wellbeing of our clients and staff during our site inspections. All BMT site inspectors are required to carry safety equipment including masks, gloves and hand sanitiser, and adhere to social distancing rules. Where possible, they will also remove their shoes. Along with this, we ask all occupants to open doors and turn on lights during the inspection, so that our specialist site inspector doesn’t need to touch anything. We are staying updated on the latest government requirements and are adapting our operations to abide by these rules and regulations. Rest assured that safety is our top priority during these unprecedented times. Having prepared tens of thousands of depreciation schedules every year, we know that a site inspection plays a vital role in the depreciation process, particularly when it comes to supporting your claim in the event of an ATO audit. We have a well-established and long-lasting relationship with the ATO, and they often require evidence to justify the deductions in a depreciation schedule. It is important that we can directly give feedback based upon the inspection that we completed, regardless of how long ago that was. Our site inspections also ensure accuracy. Our specialist site inspector will measure the building and floor coverings, note down the construction method, workmanship, materials used and condition of the property. We will look for any evidence of works completed, both recently and anything that might have taken place in the last 30-40 years. The current owner of an income-producing property can often claim deductions for work that was completed by previous owners. We document everything that we can, making notes and taking photographic records. In the case of residential apartments or office towers and industrial complexes with a strata plan, the site inspector will assess all common property items. Each owner has a right to depreciate a portion of the common areas based up their percentage of ownership, which is usually outlined on the strata plan our building unit plan. Rest assured that safety is our top priority during these unprecedented times. Another important step during the site inspection is to identify as much qualifying plant and equipment within a property as possible. This includes all removable or mechanical assets like hot water systems, stoves, floor coverings and so on. The higher the ratio of plant and equipment in a claim, the higher the deductions will be in the earlier years of ownership. The full site inspection only takes around 30 minutes to complete. BMT will even organise the inspection with the property manager and tenant directly at their convenience. For commercial property, the process is much the same. We will document any new fit-out installed or assets removed during an upgrade or tenant change. When construction work or assets are removed from a property during its income production period, there is often remaining unclaimed depreciation that can be written off. BMT staff are experts at determining how much of the existing claim can be written off and will make the necessary adjustments to your depreciation schedule. While not all depreciation schedule suppliers include site inspections as part of their service, we believe it’s necessary in order to claim the maximum deductions possible, ensure accuracy and maintain tax office compliance. We know that when an inspection isn’t performed, depreciation deductions get missed and amendments inevitably need to be made to your schedule. These amendments cost you money. The same applies if the site inspection is not completed by a specialist. Contracting or outsourcing the inspection is very risky. BMT will only ever use specialist staff to ensure quality, accuracy and accountability if the ATO ever conduct an audit. At this current time, BMT continues to inspect properties to provide quality depreciation schedules. As a valued member of the BMT community, we thank you for your continued support. For our latest position on the developing Covid-19 pandemic please visit https://www.bmtqs.com.au/covid-19.

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Do you have what it takes to be a Quantity Surveyor?

BMT team — Thu, 14 Mar 2019 22:06:55 +0000

The position of a Quantity Surveyor is fundamental to most building projects and plays an integral part in managing building costs, estimating and calculating construction cost figures and ensuring value is prioritised at every step. A Quantity Surveyor must also abide to all the necessary regulatory standards. For budding professionals wondering what it takes to be a Quantity Surveyor, we look at the qualifications and skills necessary. Contents: Tasks and duties of a Quantity Surveyor Quantity Surveyors must be appropriately licenced and are recognised as such What qualifications do I need? What skills are employers looking for? Quantity Surveyors that specialise in depreciation Tasks and duties of a Quantity Surveyor A Quantity Surveyor will liaise with other construction professionals to deliver projects, examine structural drawings and specifications and review changes to construction plans and assess costs. They may be required to produce financial forecasts for clients and perform feasibility assessments to help guide project decisions. Quantity Surveyors can work in either the private or public sector. Private sector roles can be found at consulting firms, whilst public sector roles are found mainly in State Government Departments and authorities or in the Australian Construction Service with Building Contractors, Financiers, Property Developers, Project Managers and universities. Some Quantity Surveyors specialise in calculating construction costs of residential and commercial buildings for property depreciation purposes. This includes measuring and calculating historical construction costs for claiming building write-off based on the cost of the structural element of buildings. Of the Quantity Surveying and tax depreciation firms in Australia, BMT Tax Depreciation is considered the market leader. Quantity Surveyors must be appropriately licenced and are recognised as such Their skills are so valued that Quantity Surveyors are recognised under Tax Ruling 97/25 as one of the few professions with the ability to calculate costs for the purposes of depreciation. Quantity Surveyors are also required to be registered tax agents. It’s important to check whether there are any licensing requirements to work as Quantity Surveyor in your state. For example, in Victoria, Quantity Surveyors are required to be registered with the Victorian Building Authority. What qualifications do I need? To work as a Quantity Surveyor in Australia, you are required to gain graduate qualifications in quantity surveying or construction management, by competing a tertiary qualification such as the Bachelor of Construction Management or Bachelor of Construction Project Management. The Australian Institute of Quantity Surveyors (AIQS) offers higher education course accreditation and a substantial scholarship program for Year twelve students who qualify for entry into a Quantity Surveying, Construction Economics, Construction Management (Economics) or other appropriate course at an AIQS accredited university in Australia. It’ s also a good idea to explore cadetship opportunities. Some organisations offer cadetships for students completing relevant industry degrees. What skills are employers looking for? Employers look for graduates with knowledge in construction, estimating, contracts administration and for those who possess strong written and verbal skills. According research conducted by the employment website SEEK, employers are also wishing to secure candidates with proficiency in MS Office, who are team orientated and who possess persuasion and influence over others. Quantity Surveyors that specialise in depreciation A specialist Quantity Surveyor: documents every qualifying asset in a property calculates their depreciable value to ensure that the investor maximises their deductions and ensure full compliance with Australian Taxation Office (ATO) regulations, meaning all deductions are accurately evidenced in the event of an audit. BMT Tax Depreciation CEO, Bradley Beer says, “The most rewarding aspect of the job is showing property investors the difference claiming depreciation will make to their cash flow”. Bradley and the team of specialist Quantity Surveyors at BMT have completed site inspections on all property types ranging from residential houses and apartments to commercial properties such as hotels, industrial complexes, agricultural farms, amusement parks and other iconic Australian tourist attractions. To learn more about what it takes to be a Quantity Surveyor, read our BMT Insider blog, where Bradley explains the role of a specialist Quantity Surveyor at BMT. You can also visit our website to discover why you should choose a Quantity Surveyor. For more information, contact the expert team at BMT on 1300 728 726 or check out the BMT Careers page.

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What you need to know about Quantity Surveyors

BMT team — Tue, 28 Aug 2018 05:39:12 +0000

If you’re new to the world of property depreciation, you may be wondering why this is the domain of Quantity Surveyors. Why are they the ones to prepare tax depreciation schedules? What are their qualifications? Why can’t a Tax Accountant do it instead? To answer these common questions and make at least one area of depreciation a bit less confusing, we’ve put together this quick run-down on Quantity Surveyors – who they are, what they do and what qualifications they require to provide tax depreciation schedules for investment properties. Contents: What is a Quantity Surveyor? Qualifications Areas of expertise Playing it by the book What is a Quantity Surveyor? A Quantity Surveyor is a professional who specialises in estimating the value of construction costs and other assets. Quantity Surveyors may get involved at various stages: prior to construction, during construction and post-construction. They use their skills to determine the cost of building works and fit-out, whether it’s for a residential property or any of the structures and assets within the vast spectrum of commercial properties. Quantity Surveyors are one of a few professionals recognised by legislation (Tax Ruling 97/25) to have the appropriate construction costing skills to calculate building costs for capital allowance claims. The ruling also states that Accountants, Solicitors, Real Estate Agents and Valuers are not recognised to estimate construction costs for claiming capital allowances. Qualifications To be able to prepare tax depreciation schedules, there are a few qualifications a Quantity Surveyor must have. Firstly, they must be a member of the Australian Institute of Quantity Surveyors (AIQS). The AIQS is an industry body that assists its members to maintain compliance with industry regulations and Australian Standards ensuring a high quality of service. In addition, quantity surveying firms must be registered tax agents with the Tax Practitioners Board (TPB). The TPB is the national body responsible for the registration and regulation of tax agents ensuring compliance with the Tax Agents Services Act 2009 (TASA). Quantity Surveyors need to be registered tax agents to complete tax depreciation schedules for investment properties. Areas of expertise Not all Quantity Surveyors are experts in depreciation. Some use their skills to plan expenditure on building works prior to or during construction for feasibility purposes or cost management, for instance. Depreciation experts, on the other hand, use a very particular set of skills to ensure depreciation claims are maximised. Only a tax depreciation specialist can be relied on to maintain detailed knowledge of all current Australian Taxation Office (ATO) Tax Rulings relating to depreciation. Playing it by the book Quantity Surveyors are sticklers for rules, and for good reason. They work closely with the ATO and professional industry associations to stay up to date on the latest depreciation legislation and tax rulings. While the schedules aim to outline the maximum deductions for the property’s owners, it’s important that Quantity Surveyors follow ATO guidelines to ensure that the claims are legitimate. The work a specialist Quantity Surveyor does in completing a depreciation schedule also protects investors, should an ATO audit occur. If the ATO questions an investor’s tax return, they will be armed with the necessary evidence to support their depreciation claim. For more information on Quantity Surveyors, you can read about the five questions you should ask your Quantity Surveyor.

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Depreciation methods that mean more for you

BMT team — Tue, 01 Mar 2016 05:08:19 +0000

Learn how the experts maximise deductions Many investors ask the question, ‘Why can’t I just do it myself or ask my Accountant to claim depreciation deductions on my investment property?’ The answer is simple. Quantity Surveyors who specialise in depreciation have the recognised qualifications, skills and specialist knowledge of the depreciation methods available to help property investors maximise their deductions. The Australian Taxation Office recognise Quantity Surveyors under tax ruling TR/97 with the appropriate knowledge to estimate construction costs for depreciation purposes. However, not all Quantity Surveyors are created equally. A tax depreciation quantity surveying firm, will use their skills to accurately calculate depreciation deductions for investment property owners. This helps to ensure owners can claim maximum returns for the lifetime of ownership. How do Quantity Surveyors do this? To demonstrate how the depreciation methods a specialist Quantity Surveyor uses can make a difference to an overall claim, let’s look at immediate write-off and low-value pooling. These are two depreciation methods which assist in accelerating deductions for some plant and equipment assets found in a typical residential property. Immediate write-off An immediate write-off can be applied to any plant and equipment asset which costs $300 or less within the first year of ownership, regardless of how many days the property is owned in that year. This means the owner can claim the total value of the individual asset within the first financial year, instead of claiming depreciation over the effective life of the asset. Low-value pooling This depreciation method allows some plant and equipment assets to be depreciated at an increased rate, allowing owners to take advantage of deductions sooner. There are two categories of assets which can be added to a low-value pool: Low-cost assets – depreciable assets which have an opening value of less than $1,000 in the year of purchase Low-value assets – depreciable assets that have a written down value less than $1,000. That is, the value of the asset was greater than $1,000 in the year of purchase. However, the remaining value after a previous year’s depreciation is less than $1,000 By adding these assets, investors can claim deductions for these items at a rate of 18.75 per cent in the first year of purchase and at a rate of 37.5 per cent from the second year onwards. It is important to note that once an investor adds items to a low-value pool, they must apply this depreciation method to all assets. Similarly, if an investor chooses not to pool assets, they must continue to claim deductions using either the diminishing value or prime cost depreciation methods. These rules become even more complicated when a property has more than one owner. A specialist Quantity Surveyor can prepare a split depreciation schedule in a shared ownership scenario which allows each owner to claim the deductions for their portion of interest in each asset. This can mean more assets will qualify to be written off immediately or added to a low-value pool, further maximising the deductions which can be claimed. These are just two of the depreciation methods a specialist Quantity Surveyor uses to ensure owners can claim maximum returns. Which one you chose depends on your personal investment strategy so it’s always best to contact your Accountant or Financial Adviser to discuss your situation.

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Four facts you should know about your specialist Quantity Surveyor

Bradley Beer — Tue, 31 Mar 2015 04:39:30 +0000

When an owner first purchases an investment property, often they will be recommended by their Accountant, a Real Estate Agent or their rental Property Manager to speak with a Quantity Surveyor to find out about the depreciation deductions available for their property. Many property investors are unfamiliar with the work that Quantity Surveyors do and as such, they often have many questions. A Quantity Surveyor is a qualified professional who specialises in building measurement and who estimates the value of construction costs. Quantity Surveyors are able to apply their expertise during the various stages of construction to ascertain the cost of building works on any residential or commercial property. Often Quantity Surveyors will specialise in providing their expertise at a particular stage in the construction process, for example at feasibility stage, they use their knowledge of construction methods and costs to advise the owner of the most economical way of achieving their requirements. After construction is completed, Quantity Surveyors can specialise in providing the costs of a building for the purpose of providing depreciation schedules. Below are four facts investors should know about Quantity Surveyors who specialise in providing depreciation schedules. 1. Why should a property investor obtain a Quantity Surveyor who specialises in depreciation? A significant number of property investors remain unaware that they are entitled to claim a deduction due to the gradual wear and tear of the structure of a property (capital works deduction) and the plant and equipment assets contained within a property. These deductions are known as depreciation. Similarly, a number of property investors who self-assess at tax time don’t obtain adequate advice from an expert on the depreciation deductions they can claim. This can result in an investor paying more tax than they need to. Most investors lack the complex knowledge of depreciation legislation and the methods used to calculate deductions necessary to ensure their depreciation claims are correct and maximised. Quantity Surveyors are recognised under Tax Ruling (TR) 97/25 as one of a select group of professionals deemed qualified to provide construction cost estimates for depreciation purposes. A Quantity Surveyor who specialises in depreciation will use their skills to produce a schedule which outlines all of the deductions the owner of a property can claim for both structural items and plant and equipment assets. This schedule can then be used by the owner of the property and their Accountant to apply the correct deductions when they lodge their annual income tax return. 2. Ensure your Quantity Surveyor has the appropriate industry qualifications It is important to ensure your specialist Quantity Surveyor is a registered tax agent. The Tax Agent Services Act (TASA) of 2009 provides the appropriate standards of professional and ethical conduct and regulations which tax agents, BAS agents, financial advisers and other professionals involved in providing advice relating to tax and financial service industries should abide by. The Tax Practitioners Board has stipulated that Quantity Surveyors are required to be registered under TASA if they are completing tax depreciation schedules for a fee or reward. There are also a number of professional industry associations which Quantity Surveyors can become members of, such as the Australian Institute of Quantity Surveyors (AIQS) and the Royal Institute of Chartered Surveyors (RICS). These industry associations provide guidelines and advice, allowing specialist Quantity Surveyors access to information which helps them to ensure the valuations they provide investors with for depreciation purposes are accurate. Learn more: BMT Tax Depreciation’s industry qualifications 3. Ask whether your specialist Quantity Surveyor provides any incentives or commissions to their referrers Some industries rely on commissions and referral fees. The nature of a reward payment is intrinsically linked to the result achieved in such industries. If a professional consulting business offers referral fees or kickbacks, the quality of the service and advice being offered could be jeopardised. The reason for the recommendation should be disclosed. A number of depreciation providers buy referrals by giving the referrer a cash kickback. Although currently there aren’t regulations preventing Quantity Surveyors from doing so, clients should ask themselves the question ‘why would a consultant need to pay someone to refer their product?’ No two depreciation schedules are equal. It is important for property investors to select a specialist Quantity Surveyor who places the emphasis on the quality and accuracy of the depreciation schedule being provided. The deductions provided within a schedule should adhere to guidelines set within depreciation legislation and therefore outline the maximum legitimate claims an investment property owner can make. 4. Ask what is included within the depreciation schedule It’s important for property investors to ensure they choose a depreciation schedule from a specialist Quantity Surveyor who includes a site inspection. Without visiting the property, it is likely that many of the plant and equipment assets within the property will be missed in the final report. The schedule should list deductions for all plant and equipment assets using both prime cost and diminishing value methods of depreciation. These are the two methods Quantity Surveyors use to calculate depreciation deductions. An investor will need to discuss which method best suits their investment strategy with an Accountant, as only one method can be selected. Asking for a list of inclusions will help investors to select the most comprehensive depreciation schedule. Apart from checking whether both depreciation methods are used, the investor should also ask whether the schedule will last the life of the property (forty years). The schedule should also outline whether any assets are eligible for an immediate write-off and use low-value pooling to accelerate deductions. A depreciation schedule which provides the investor with an effective life for each asset found will allow them to work out the best timing for completing necessary repairs and maintenance or even plan for a renovation to replace worn items. If a property has been acquired part way through a financial year, a pro-rata calculation should be provided for the percentage of the year the property was available for rent. Where the property has more than one owner, a Quantity […]

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