» Quantity Surveyor

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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Why you need a site inspection for a tax depreciation schedule

BMT team — Wed, 15 Jun 2022 23:35:41 +0000

Most of us wouldn’t purchase a car before seeing it or exchange unconditional contracts for a property without a building and pest inspection. We believe the same applies to site inspections when preparing a tax depreciation schedule. Property depreciation can save you thousands, sometimes tens of thousands, each financial year. A tax depreciation schedule holds the key to unlocking this cash flow. Your schedule lasts the lifetime of the property, so it’s important to get it right from the very beginning. In this article we will explore: What is a depreciation site inspection and what does it involve Importance of noticing improvements during a site inspection Maximising claims while maintaining compliance Support from the industry Site inspections make it easier for you Key points A site inspection ensures your depreciation claims are maximised and are compliant Hard-to-find assets are always found during a site inspection Both the AIQS and NTAA support the requirement of site inspections. What is a depreciation site inspection and what does it involve? A site inspection for depreciation purposes is different to other inspections like building or open houses. To complete a site inspection, a specialist needs to enter the property to find all the items that can be depreciated. During the inspection, you will see them documenting the property’s items, taking measurements and photographs and analysing the workmanship. An inspection is especially important if your property was purchased second hand. The site inspector will make note of all plant and equipment assets in the property. Although some of these assets may be impacted by 2017 legislation changes, they can still be included in your capital loss statement. In some scenarios this can be an important component if or when you decide to sell the property or dispose of the assets. More importantly though, a trained specialist will identify additional works that will qualify for depreciation via renovations or additions completed sometime many years ago. Importance of noticing improvements during a site inspection Renovations and additions completed to a property over many years ago can be hard to find and are often missed by the untrained eye. For example, if your investment property originally had a gravel driveway and if anyone concreted the section where cars are parked, it may not seem like a qualifying addition, but that driveway will increase your claim. In this scenario, you wouldn’t be able to claim depreciation on the gravel as it is soft landscaping. But you can still claim capital works deductions on the newly concreted section for up to forty years. A specialist site inspector will identify any renovations completed by the previous owner. This means that if the original structure of the building is too old and ineligible for capital works deductions, you can still reap returns from any recent renovations completed in the last thirty plus years. Data shows that of all the schedules completed by BMT, 66 per cent have been for properties that have undergone some kind of renovation or addition. Maximising claims while maintaining compliance Knowing what to include in a tax depreciation schedule can seem straight forward. You look at the property and include what’s there, easy right? However, a specialist knows what to look for during a site inspection to ensure that your claim is maximised correctly. For example, a ducted air conditioner has division 40 and division 43 components. The ducting needs to be valued separately and added to the capital works deduction while under TR2021/3 the packaged unit is considered plant and equipment and depreciated using its unique effective life. Another example might be properly using immediate deductions that allow the owner to instantly deduct qualifying assets in the year of purchase. While knowing the cost of the asset may appear to be the only thing required to claim the deduction, this isn’t the case. An asset must meet four important steps to be eligible. Support from the industry The Australian Institute of Quantity Surveyors (AIQS) is the peak professional standards body for build environment cost professionals. The National Tax and Accountants’ Association (NTAA) is the representative voice for the tax community. Both the AIQS and NTAA support the requirement of site inspections. They know that when site inspections aren’t completed, deductions are missed, and costly errors are made. Some of the most common errors that happen is incorrectly claiming capital works deductions and misusing depreciation incentives such as the immediate deduction. When errors such as these are made, you can come under Australian Taxation Office scrutiny. Site inspections make it easier for you As a property investor, you are already juggling many things from work to tracking your cash flow to mapping out your future investment strategy. When a site inspection isn’t conducted, it means you must do a lot of the heavy lifting, from organising stacks of paperwork to providing the property’s structural information that you have never needed to think about before and not being a specialist yourself things will get missed. A site inspection takes the guess work out of preparing your schedule. BMT Tax Depreciation can make it even easier by organising the inspection directly with your property manager. BMT has been conducting site inspections on properties for over twenty years. A BMT Tax Depreciation Schedule has never failed an audit and is the preferred supplier to thousands of accountants across the country. To learn more about depreciation and how a site inspection can ensure you claim the most from your investment, Request a Quote or call BMT on 1300 728 726.

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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 should know about the role of a Quantity Surveyor

BMT team — Tue, 05 Feb 2019 04:12:55 +0000

Do you know what the role of a Quantity Surveyor is? It’s a title that causes confusion, with many people associating the job with the Cadastral Surveyors you sometimes see measuring angles and distances with tripods on the side of the road. Quantity Surveyors play a different role and are qualified professionals specialising in building measurement and construction cost estimation. Quantity Surveyors are required at various stages throughout a building’s construction. However, some 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. 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. When an investor engages BMT Tax Depreciation for a depreciation schedule, we will carry out a site inspection of the property to identify and record the contained assets to calculate their deductions. A specialist Quantity Surveyor documents every qualifying asset in a property and calculates their depreciable value to ensure that the investor maximises their deductions. This includes measuring rooms with a laser measurer, recording assets’ brand or model numbers and photographing improvements at the property. Quantity Surveyors 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 that the most rewarding aspect of the job is showing investors the difference that claiming depreciation will make to their bottom line. “Investors are very happy when they learn they will save thousands of dollars each year by claiming depreciation,” Bradley said. “There are so many property investors who simply aren’t aware of depreciation or don’t maximise their claims.” Bradley and the team at BMT have completed site inspections on all property types ranging from residential houses and apartments to commercial properties such as hotels, industrial warehouses, farms and even multimillion-dollar wineries. No stone is left unturned when it comes to recording and valuing assets. “I did a site inspection for The Block 2018 apartments at The Gatwick and recorded every light fitting, smoke alarm and piece of furniture,” Bradley explained. “Investors are often surprised by what they can claim and the lucrative deductions that can be found at their properties.” The thoroughness of BMT’s Quantity Surveyors helps investors to capture every asset and ensure they maximise their depreciation deductions. BMT Quantity Surveyors specialise in tax depreciation and have a detailed knowledge of current ATO Tax Rulings. They are members of the Australian Institute of Quantity Surveyors (AIQS), ensuring compliance with industry regulations and Australian Standards. BMT Quantity Surveyors are also 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). For more information on the role of a Quantity Surveyor, contact the expert team at BMT on 1300 728 726 or request a quote today.

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Why choose a depreciation expert?

BMT team — Fri, 21 Sep 2018 04:39:39 +0000

It’s well known that you can claim wear and tear on a business vehicle, but did you know that you can also claim wear and tear on your investment property? Many Australians are likely to be unaware that their investment properties hold significant tax depreciation deductions, meaning they could be missing out on thousands of dollars. As your property gets older, the building and items within it start to wear out. The Australian Tax Office (ATO) governs legislation that allows owners of income producing properties to claim a deduction relating to this wear and tear. Depreciation can be claimed for a variety of building types, including both residential and commercial properties, such as offices, hotels, restaurants, retail spaces, educational facilities, warehouses, agricultural properties and many more. Depreciation falls into two different categories: plant and equipment’ includes easily removable fixtures and fittings such as dish washers, ovens, carpet, blinds, while ‘capital works’ covers the structure of the property and permanently fixed assets including bricks, mortar, doors and driveways. Depreciation experts are recognised by the ATO Quantity surveyors are recognised as one of a select group of professionals deemed qualified to provide construction cost estimates for depreciation purposes. They will use their skills to produce a comprehensive tax depreciation schedule, which outlines all the deductions a property owner is eligible to claim for both capital works and any plant and equipment assets they are eligible to claim. Benefits of choosing a depreciation expert You only need to get a depreciation schedule produced once, and it will outline the depreciation deductions for the lifetime of your property. The cost of the report itself is also 100 per cent tax deductible. If you have not previously claimed depreciation, your Accountant may be able to backdate your claim for the previous two years, so you can recoup some additional cash back on previous years’ tax returns. It is interesting to note that assets removed during renovations may also be eligible to be fully written off as a tax deduction. It is a good idea to engage a quantity surveyor prior to construction work starting to make sure that all removed items are identified and captured as part the depreciation report. BMT Tax Depreciation are a national quantity surveying firm, who specialise in the preparation of tax depreciation schedules for a variety of property types. They use their expertise to ascertain the costs of building works prior to or during construction for feasibility cost management purposes. A BMT Tax Depreciation Quantity Surveyor utilises a combination of cost expertise and knowledge of taxation legislation to concentrate on property depreciation. The difference is reflected in a property investors’ bottom line BMT Tax Depreciation will show you how to claim more deductions, pay less tax and see a greater return on your investments. BMT Tax Depreciation schedules are designed specifically for ease of use by accountants to incorporate depreciation deductions into an investors’ income tax assessment. All information is prepared in full compliance with ATO regulations, meaning that deductions are detailed and evidenced correctly in the event of an audit. BMT Tax Depreciation also provide a free, easy to use tax depreciation calculator, which can provide an estimate of available deductions for any property an investor that is planning on purchasing. Alternatively, you can contact one of our expert staff on 1300 728 726 for a free estimate of available deductions.

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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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Five questions you should ask your Quantity Surveyor

BMT team — Thu, 01 Mar 2018 04:55:08 +0000

Are you an investor who’s heard about the benefits of depreciation and have decided to start claiming? That’s great! Claiming depreciation will help you maximise the cash return from your investment property. As a non-cash deduction, depreciation is a quick win for investors and requires minimal effort on the owner’s end. But before organising a Quantity Surveyor to prepare your tax depreciation schedule, it’s important to note that not all Quantity Surveyors are created equal, and some due diligence is usually required before forging ahead. Just like you would seek the best Property Manager to manage your investment property, you should do the same when choosing to work with a Quantity Surveyor. To help ensure you get maximum deductions, here are five questions you should be asking any potential Quantity Surveyor. 1. What industry qualifications do you have? And are you a registered Quantity Surveyor? When choosing a Quantity Surveyor, it is important to check that they are members 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 to being accredited by the AIQS, it is also important to check that the firm are 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. 2. Do you specialise in tax depreciation? Not all Quantity Surveyors specialise in tax depreciation. 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. This difference is reflected in a property investors’ bottom line. Because of their in-depth industry knowledge, a specialist Quantity Surveyor can help their clients claim more deductions, pay less tax and see a greater return on their investment. 3. Is my property too old? Since changes to claiming depreciation on second-hand residential properties were introduced following the 2017 federal budget, many investors now wonder if they’re still able to claim depreciation for their investment properties. The bottom line is that it is always worth enquiring about what depreciation deductions are available. Even if your property was purchased second- hand after this date, it is likely there will still be some deductions available, whether it’s in the form of capital works deductions, previous renovations or newly installed plant and equipment assets. Now more than ever it’s important to maximise the deductions you are legally entitled to. 4. What’s included in your tax depreciation schedules? Your tax depreciation schedule needs to be comprehensive and ATO compliant. This helps you claim maximum deductions and also covers you in the event of an audit from the ATO. As an example of what should be included in a schedule, a BMT Tax Depreciation Schedule contains a one page overview of total deductions, the prime cost and diminishing value methods for plant and equipment assets, a forty year projection of all available deductions, and a glossary of terms for easy understanding. The Quantity Surveyor should also be able to provide Excel and CSV schedule files for Accountants and owners for easy importing into compatible accounting software. Furthermore, if your property is owned by more than one party, your Quantity Surveyor should be able to provide you with a split report, as this often results in higher deductions earlier. 5. Do you outsource any of your work? Some tax depreciation companies will outsource parts of the process of preparing a schedule to contractors or external Quantity Surveyors and Site Inspectors. While not technically incorrect or bad practice, this can be an inconvenience service wise and may lead to a greater chance of errors occurring, if several parties are working on the one schedule. Please note that BMT do not outsource any of their operations.

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Five quirky facts about your specialist Quantity Surveyor

BMT team — Fri, 30 Oct 2015 04:17:08 +0000

On most occasions, property investors are introduced to a Quantity Surveyor by their Accountant or a property professional. While an Accountant or a property professional will explain that these professionals are the bee’s knees when it comes to providing depreciation advice, investors are often unsure of exactly what a Quantity Surveyor does. Quantity Surveyors are one of a few professionals recognised by the Australian Taxation Office (ATO) to have the appropriate construction costing skills to calculate building costs for depreciation purposes. However, not all Quantity Surveyors are experts in depreciation. Some use their skills to ascertain the costs of building works prior to or during construction for feasibility purposes or cost management. Depreciation experts, on the other hand, use a very particular set of skills to ensure your tax depreciation claim is maximised. Learn More: How to choose an expert Quantity Surveyor to maximise depreciation deductions What is tax depreciation? As a building gets older, items wear out – they depreciate. The Australian Taxation Office (ATO) allows property owners to claim this depreciation as a deduction. Depreciation deductions can amount to thousands of dollars put back in an investors pocket each year. When the time comes for an investor to select a Quantity Surveyor to complete their tax depreciation schedule, it is best to choose one who eats, sleeps, drinks and breathes depreciation. ‘So what quirky habits does a Quantity Surveyor who specialises in depreciation have’, you ask? Let’s take a look at what helps them to set your depreciation schedule apart from the rest. A Quantity Surveyor has a passion for numbers In order to prepare your tax depreciation schedule, a specialist Quantity Surveyor will put their passion for numbers to good use. Specialist Quantity Surveyors assess the structure of any income producing property and the plant and equipment assets contained within to calculate their depreciable value. Structures such as walls, floors, windows and roofs are able to be claimed as capital works deductions at a rate of 2.5 per cent per year over forty years for any property in which construction commenced after the 15th of September 1987. This may sound easy, but calculating deductions for the structure of a property is never this simple. Often older properties have undergone renovations. So long as any work completed took place within dates legislated by the ATO, the owner will be entitled to claim depreciation deductions, even if the work was completed by a previous owner. Learn more: Older properties and depreciation Calculating depreciation for plant and equipment assets is also quite a complex task. There are over 1,500 depreciable plant and equipment assets recognised by the ATO and each of them have individual effective lives by which depreciation deductions are calculated. That’s a whole lot of numbers to consider without the help of an expert who has done years of study and research into the topic and has years of experience. Needless to say, it is best to ask for the help of a trained expert. The ATO recognise Quantity Surveyors for a reason, so it makes sense to leave the number crunching up to a specialist. Quantity Surveyors are obsessive compulsive about including every plant and equipment asset on your depreciation schedule Specialist Quantity Surveyors have excellent attention to detail. A good one also won’t be satisfied with just an itemised list provided by the owner of the property. They will insist on completing a detailed site inspection of the property. During a site inspection, they will put their ‘photography skills’ to the test, taking pictures of every depreciable asset located both inside and outside of the property. Plant and equipment assets hide in even the most unlikely recesses of a property. They can be found on every pavement just waiting for the garbage man to dispose of the waste they contain, hanging from the rod of every shower, lurking down the back corner of the yard helping to store the lawnmower, or even have the ability to help control the room temperature. Quantity Surveyors see it as their duty to hunt these objects down, keep a record of them and ensure every single one is listed on the depreciation schedule for the owner. They also use their laser like focus to measure distances from wall to wall, floor to ceiling. When it comes to all things depreciable, no stone goes unturned. Not even your friendly garden gnome is safe. Their best friends are Accountants and property professionals Specialist Quantity Surveyors have a tight knit relationship with Accountants and property professionals. This friendship is mutual, as the work that these professionals do goes hand in hand with the work that a Quantity Surveyor will do. Quantity Surveyors can help potential investors by providing tax depreciation estimates to their Real Estate Agent for any property they are considering for sale. They also liaise with Property Managers who help arrange site inspection times with tenants when the time comes to complete the depreciation schedule. Once a comprehensive tax depreciation schedule has been completed, specialist Quantity Surveyors can send a copy to your Accountant or you can take it to them when completing your annual income tax assessment to find out what deductions are available to be claimed. Accountant’s also can help you to claim deductions more regularly using methods such as Pay As You Go withholding variations, or to adjust the two previous financial year’s claims if deductions have not been claimed or maximised. There are methods to their madness Specialist Quantity Surveyors will use tactics such as immediate write-off and low-value pooling to help investors maximise the deductions they claim and get more back from the tax man. An immediate write-off can be applied to any plant and equipment asset which costs $300 or less. Some might think ‘why bother claiming those smoke alarms, they’re only $25 each’, but believe us when we say, these types of objects truly do add up. The total value of any item eligible for an immediate write-off can be claimed in full in the first […]

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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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