Questions & Answers

investment-property-taxIn a Quantity Surveyors Report, I was told that I could claim the historical cost of the building, what does that mean?

In a property Tax Depreciation Report it means that you can claim the cost of the original construction at the date it was constructed. As an example if you had a house built today which cost $210,000 to build, you could then claim the $210,000. But you have to remember it is the building cost so if the same house was built in 2000 it would only cost about $120,000, therefore the older the house the lower the construction cost. A current Tax Depreciation Report performed by an experienced Quantity Surveyor will highlight these costings.

My real estate agent told me that if I purchased an older property that I would not be able to claim tax depreciation. Is that true?

Unfortunately, this is a common remark by agents who don’t understand tax depreciation on property. If the property was built after 1985 it will have a building component, one has to remember all properties have a content component (white goods, floor and window coverings etc) which are claimable.

What has the best tax depreciation units or houses?

Units usually have a higher depreciation than houses because of the common property installed, especially if they have a lift. Check an article I wrote on Tax Depreciation and Quantity Surveyor Reports on Units for The Australian Property Investor magazine

I have just spent over $60,000 landscaping my property, can I claim this as a deduction?

The hard landscaping can be claimed (retaining walls, paths, drives and fences) at 2.5% but under current ATO legislation plants cannot be claimed including the lawn.

I have a rental property and I want to re-concrete the drive to improve the place for my tenants. Can I claim this?

The drive will cost you approximately $8,900. However, for the same investment you can replace the stove, install an air-conditioner in the lounge and master bedroom and add ceiling fans in the bedrooms, which tenants are likely to appreciate more than a new drive. You can claim on the drive, which would depreciate at 2.5% per year, whereas the white goods would return a minimum of 12% per year.

My investment house was badly damaged in the floods and a tax depreciation company asked me to get the total costs from the insurance company so I can claim, but the insurer will not supply the information, what can I do?

You cannot claim repairs in this manner as it was the insurance company who paid for the repairs, not you. In actual fact the insurance company is probably claiming the repairs. As a property investor you should have been deducting the cost of the insurance policy and premiums.

I furnished my investment property which was $22,000 but I got it discounted to $16,150, can I claim the original price?

No, you can only claim what it actually cost you (what you paid for it).

Why do some companies charge $750 and others charge $500 are their reports any better?

The same reason that builders charge more than others; it’s all to do with costs. We at Property Returns believe that our charges are reasonable for our expertise and the supply of a thorough and reliable Tax Depreciation Schedule/Quantity Surveyors Report. Why pay more?