BMT Tax Depreciation Estimate - Ritchie Property · 2014-09-26 · 4 April, 2013 Ritchie Property Solutions PO Box 1688 BUDERIM, QLD 4556 Lingara Avenue, PALMWOODS, QLD 4555 - 192584.1

BMT Tax Depreciation EstimateLingara Avenue

PALMWOODS, QLD 4555

4 April, 2013

Ritchie Property SolutionsPO Box 1688BUDERIM, QLD 4556

Lingara Avenue, PALMWOODS, QLD 4555 - 192584.1

Dear Sir/Madam,

Please find attached the BMT Tax Depreciation Estimates for the above property detailing thedepreciation and associated tax allowances that may be available to the owner under theIncome Tax Assessment Act 1997 (ITAA97).

This document is intended to provide a guide to the potential depreciation and buildingallowances available from the purchase of the above residential property, facilitating theestimation of the after tax return on the investment over the first 10 full years of ownership.

1.0 Information

The following information was used in the preparation of the schedules:

Ø Written and verbal information provided by Ritchie Property Solutions.

2.0 Depreciation Potential – Plant and Capital Allowance

The purchaser of the property, intending to use it for income producing purposes, is entitled todepreciation including:

Ø Division 40, Depreciation of Plant and Equipment; and

Ø Division 43, Capital Works Allowance (2.5 % pa).

The depreciation of plant and equipment items is based on the diminishing value effective life ratesas published by the commissioner of taxation.

In the scenario where plant and equipment items are not sold at an agreed value these items willbe depreciated on the basis of a just attribution of the total expenditure (42-65 ITAA97).

3.0 Capital Work Allowance

The special building write off allowance is based on the industry specific eligible dates. If theproperty qualifies for the special building write off, the applicable depreciation rate will be used.Where properties do not qualify for the special building write off allowance, no capital worksallowance will be used.

BMT Tax DepreciationQUANTITY SURVEYORS

Level 7, 320 Adelaide StreetBrisbane QLD 4001GPO Box 3229Brisbane QLD 4001t 07 3221 9922f 07 3221 9933

e [email protected] www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions192584.1

mailto:[email protected]

http://www.bmtqs.com.au

The allowance for capital works will be based on the historical cost of construction less non-depreciable items.

4.0 Estimate Calculation

This report is based on a just attribution of the total expenditure to estimate the allowances forplant. The estimates provided are based on the sale price as indicated, as the final purchase priceat this time is not known.

This estimate has been provided for the purpose of informing the investor of the depreciationpotential. Different depreciation returns are available and are influenced by the purchase price ofthe property.

Please note that the first year calculations are based on ownership over a full financial year.

5.0 Disclaimer

This report has been based on very preliminary documentation, and the figures provided should betreated as a guide only.

As documentation improves, BMT Tax Depreciation will be able to provide more accurateestimates of depreciation.

6.0 Conclusion

As can be extracted from the attached tables, the units will obtain maximum depreciationpotential within the first 5 years of ownership.

BMT Tax Depreciation would be pleased to provide a complete detailed tax depreciation reporton any of the units in the above property upon request.

Our results suggest employing a specialist to maximise the various tax allowances that are availableto this property. This will have a significant effect on improving the after tax return of this investment.

Should you or the purchaser wish to discuss the contents of this report in more detail, please do nothesitate to contact Brendan Farrugia of this office.

Yours Sincerely,

BMT Tax Depreciation Pty LtdQuantity Surveyors



Appendix One

BMT Tax Depreciation EstimateLingara Avenue

PALMWOODS, QLD 4555



BMT Tax Depreciation Estimates &BMT Tax Depreciation Reports

BMT Tax Depreciation EstimatesBMT Tax Depreciation Estimates ensure that investors are easily able to determine their after-tax cash position if they were to purchase a particular property. Presenting a potential investor with a BMT Tax Depreciation estimate assists the buyer, results in a value added service and often helps with early sales. The report will show the minimum and maximum range of depreciation along with the expected depreciable ‘plant and equipment articles’ within the building and the building write off allowance.

BMT Tax Depreciation ReportsBMT Tax Depreciation Reports are used to claim depreciation deductions when completing your tax return. The report

will provide the basis for maximising claims covering both plant and equipment depreciation and building write off. Many investment property owners remain unaware of the benefits that tax

depreciation provides. There are usually thousands of dollars to be claimed in depreciation deductions on any investment property. BMT Tax Depreciation specialise in maximising

the total depreciation available from a given property under current legislation.

Marketing/Real Estate Agent engages BMT TaxDepreciation to complete a Tax Depreciation Estimate

for a specific development, prior to, or during marketing phase

How the Documents Work

Investor purchases the property

After settlement the purchaser engages BMT TaxDepreciation to complete a Tax Depreciation Report.

This document is offered by BMT Tax Depreciation at adiscounted rate as BMT have knowledge of the property

BMT Tax Depreciation Report contents are used in the purchaser’s tax return preparation

Property Tax Depreciation and Construction Cost Consultants

Estimate of Depreciation ClaimableTypical 2 Bedroom Villa

Lingara Avenue, PALMWOODS, QLD 4555Purchase Price

$345,000

MaximumYear Plant &

EquipmentDivision 43 Total

1 7,618 5,141 12,7592 6,226 5,141 11,3673 4,618 5,141 9,7594 3,677 5,141 8,8185 2,961 5,141 8,1026 3,031 5,141 8,1727 2,009 5,141 7,1508 1,769 5,141 6,9109 1,106 5,141 6,247

10 688 5,141 5,82911 + 1,152 154,194 155,346

Total $34,855 $205,604 $240,459

Comparison Yr 1-10 (Min & Max)

$0

$1,300

$2,600

$3,900

$5,200

$6,500

$7,800

$9,100

$10,400

$11,700

$13,000

1 2 3 4 5 6 7 8 9 10Years

Maximum Minimum

MinimumYear Plant &


1 5,962 4,023 9,9852 4,873 4,023 8,8963 3,614 4,023 7,6374 2,877 4,023 6,9005 2,318 4,023 6,3416 2,372 4,023 6,3957 1,572 4,023 5,5958 1,384 4,023 5,4079 866 4,023 4,889

10 538 4,023 4,56111 + 902 120,674 121,576

Total $27,278 $160,904 $188,182

Cumulative Yr 1-10 (Min & Max)

$0

$8,600

$17,200

$25,800

$34,400

$43,000

$51,600

$60,200

$68,800

$77,400

$86,000

1 2 3 4 5 6 7 8 9 10Years

Maximum Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Brendan Farrugia at BMT Tax Depreciation on 07 3221 9922








Estimate of Depreciation ClaimableTypical 3 Bedroom Villa

Lingara Avenue, PALMWOODS, QLD 4555Purchase Price

$395,000

MaximumYear Plant &


1 8,095 6,598 14,6932 6,770 6,598 13,3683 5,001 6,598 11,5994 3,949 6,598 10,5475 3,161 6,598 9,7596 3,177 6,598 9,7757 2,117 6,598 8,7158 1,665 6,598 8,2639 1,282 6,598 7,880

10 800 6,598 7,39811 + 1,336 197,917 199,253

Total $37,353 $263,897 $301,250

Comparison Yr 1-10 (Min & Max)

$0

$1,500

$3,000

$4,500

$6,000

$7,500

$9,000

$10,500

$12,000

$13,500

$15,000

1 2 3 4 5 6 7 8 9 10Years

Maximum Minimum

MinimumYear Plant &


1 6,335 5,163 11,4982 5,298 5,163 10,4613 3,914 5,163 9,0774 3,091 5,163 8,2545 2,474 5,163 7,6376 2,487 5,163 7,6507 1,657 5,163 6,8208 1,303 5,163 6,4669 1,004 5,163 6,167

10 626 5,163 5,78911 + 1,046 154,892 155,938

Total $29,235 $206,522 $235,757

Cumulative Yr 1-10 (Min & Max)

$0

$10,200

$20,400

$30,600

$40,800

$51,000

$61,200

$71,400

$81,600

$91,800

$102,000

1 2 3 4 5 6 7 8 9 10Years

Maximum Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Brendan Farrugia at BMT Tax Depreciation on 07 3221 9922






