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.
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.
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.