Comments on: When do you need a depreciation schedule for your rental property?

By: Andrea

Andrea — Sun, 14 Apr 2024 22:41:42 +0000

Hello, we recently renovated (cosmetically) an old 2 bedroom unit and are wondering if it is worth our while getting a depreciation schedule? We spent approximately $80,000.
Previously we were not claiming any depreciation due to the age and condition of the property.
Regards
Andre

By: Mitchell

Mitchell — Tue, 27 Feb 2024 18:35:40 +0000

Hi,
I have recently completed renovations to our rental property (built 1950s). The renovations included new roof, new kitchen, ensuite built, bathroom renovation, repaint internal & external, front & back timber fences, tiling porch & a few other things.

Would a depreciation schedule be of value?

Thanks
Mitchell

By: Parish

Parish — Fri, 03 Nov 2023 00:00:39 +0000

Hi,
I have built a house last year and put it up on rent starting of this year. I just wanted to know whether I would need a depreciation schedule for filing my tax for FY 2022-23?

By: The BMT Team

The BMT Team — Sun, 20 Aug 2023 22:39:10 +0000

Hi Marc,

Thanks for your comment.

In this scenario, your daughter is eligible to claim a proportion of deductions based on the area of the home which is rented out.

As a general guide, apportion the expenses based on the floor area solely occupied by the renter (user), and add that to a reasonable amount based on the tenant’s access to common areas.

Due to the 2017 legislation changes, the plant and equipment assets don’t qualify for depreciation as they’re considered second-hand due to your daughter occupying the property. However, capital works deductions are available.

Thanks,
The BMT Team.

By: Marc Logan

Marc Logan — Thu, 17 Aug 2023 01:15:42 +0000

My daughter bought a 2 bedroom apartment built around 2013 and has been living in it for 2 years.

She is renting out the second bedroom ensuite and essentially sharing 50% of the space with a tenant.

Is she eligible to claim a depreciation deduction on half the property?

By: The BMT Team

The BMT Team — Wed, 16 Aug 2023 22:39:02 +0000

Hi Alex,

Thanks for your comment.

It’s important to consult a specialised quantity surveyor before and after any renovations to determine the best outcome for each circumstance. This is so all assets can be correctly identified and either scrapped or claimed as a deduction or form part of the cost base.

Because you’re conducting repairs and upgrades before renting out the property, you can’t claim a deduction for the items removed and scrapped. However, you can claim the new assets moving forward over their effective life.

You can also claim depreciation on any prior structural renovation works for the apartment and common areas.

Any common assets like security gates are included in a tax depreciation schedule. The deduction amount is determined based on the proportion of ownership.

For more information contact one of our depreciation specialists on 1300 728 726 or Request a Quote.

Thanks,
The BMT Team.

By: Alex

Alex — Fri, 11 Aug 2023 18:12:11 +0000

Hello, I am settling on an apartment in an older 1970s block which I will rent out after some repairs and upgrades. Is it better to have a QS cease a depreciation schedule before renovations then adjust it after, or just wait until after? For example can I enjoy an upfront deduction when I replace the existing windows, if the windows were installed after 1987?

Also, does a QS assess items like the compound’s newly-installed security gates, partially paid by the vendor of this apartment?

Thanks in advance – Alex

By: The BMT Team

The BMT Team — Fri, 11 Aug 2023 06:25:09 +0000

Hi Zhuo,

Thanks for your comment.

In scenarios where an individual’s income is within the tax-free threshold, tax deductions, including depreciation, can’t be claimed as there isn’t a taxable income to claim against.

Your wife will only be able to claim her portion of the deductions against her taxable income.

As we’re only specialised in depreciation, we recommend consulting your accountant or financial adviser for advice specific to your scenario.

Thanks,
The BMT Team.

By: Zhuo Lin

Zhuo Lin — Wed, 09 Aug 2023 00:32:28 +0000

I was a customer of BMT. I got Capital Allowance and Tax Depreciation Schedule from BMT in 2016. I split 50% and my wife split another 50%. These 40 years total deductions include the division 43 and division 40 components.
Over the time we owned the investment property, we claimed deductions as Schedule. But 2022-23 financial year, I earned an income less than $18200( my marginal tax rate is 0%). Can I choose the deduction amount shown as Schedule aren’t claimed this year? And my wife still claims the deductions?
In the future, will the cost base of CGT applicable not be reduce if the amount that aren’t claimed this year ?

By: The BMT Team

The BMT Team — Wed, 02 Aug 2023 06:16:05 +0000

Hi Sharon,

Thanks for your comment.

No, you don’t have to continue claiming depreciation. However, there may be considerations around the cost base and CGT in the future for any unclaimed deductions where there was a possibility to claim them based on ATO guidance.

We recommend confirming your intentions with an accountant or financial adviser.

Thanks,
The BMT Team.