If you’re thinking about ordering a depreciation schedule for your investment property, it might seem a little overwhelming at first, especially if it’s your first time even hearing about depreciation.
The good news is that besides supplying us with a few details about your property, it’s a fairly straight forward process.
The preliminary information we collect will allow us to get started on preparing a comprehensive report for your investment property, and we always strive to gather all the information we need from you in one go.
Here is a summary of the information you should have on hand when ordering a schedule from BMT.
1. Property address* – This is the most important piece of information we require. Besides the obvious fact that we need to know what property we’re preparing a schedule for, once we have the address we are able to carry out research to find out any details you may be missing or unsure of (including some of the items listed below such as purchase price, settlement date and age).
2. Your name and contact details* – We will ask for your name and contact details as well as the name the schedule should be made out in for tax purposes. Where there is more than one owner, BMT can organise a split report to ensure that each owner’s deductions are maximised. You can find out more about split reports and their benefits here.
3. Purchase price and land value – The purchase price and land value will assist us in calculating depreciation for your property.
4. Settlement date – This will be the date from which the life span of plant and equipment items in your investment property are reset and start depreciating from.
5. Approximate age of building – This will determine the feasibility of your property for capital works deductions and will affect what and how much you can claim. In a nutshell, legislation states that for any residential property that commenced construction prior to 15th of September 1987, the owner will not be able to claim capital works deductions. For commercial buildings this date is the 20th of July 1982. Read more about how older properties can still benefit from depreciation.
6. Have you ever lived in the property and if so, when did you move out? This information allows us to accurately implement legislation such as the low value pool and immediate write off. It also allows us to determine if you can go back and amend any previous year’s tax returns.
7. A list of any loose assets – In a commercial property this could include any computers and machinery that could affect deductions and in residential properties, we need to know if you plan to or currently rent the property furnished, as these furnishings can also be depreciated and included in the schedule.
8. The size of the building – This is generally required for commercial properties only and should be measured in square metres.
9. A brief description of any additions or renovations – Any additions or changes to the property will be included in a depreciation schedule. This can be particularly beneficial to owners of older properties where the original building may not qualify for capital works deductions but renovations or additions completed after the qualifying date will.
10. A brief description of the building itself – Is it a residential house, an apartment, office building, warehouse or hotel, etc.
11. Your Property Manager’s details – We ask for your Property Manager’s (or the main contact’s) details so we can arrange for access to the property to carry out an inspection.
12.Your Accountant’s details – If you wish, we can send a copy of the completed schedule directly to your Accountant, to make the process easier for you.
The process of gathering this information can easily be done over the phone and doesn’t usually take long at all. If you don’t have any of this information – don’t stress. We’re happy to talk it through and gather the information you do have, and usually that is enough to get a start on preparing your depreciation schedule.