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Depreciation . www.renos.com.au | [email protected] | 1300 550 656. What is Depreciation?. Hidden cash flow for property investors As buildings get older items wear out – they go down in value You can get a tax benefit for this! You can’t claim depreciation for your PPOR. - PowerPoint PPT Presentation
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Depreciation
www.renos.com.au | [email protected] | 1300 550 656
What is Depreciation?
• Hidden cash flow for property investors
• As buildings get older items wear out – they go down in value
• You can get a tax benefit for this!
• You can’t claim depreciation for your PPOR
What is Depreciation?
Must be carried out by a Quantity Surveyor (QS) then applied
by your accountant.
What is a Quantity Surveyor?
A specialist in building measurement and cost
estimating Pre
Construction
Construction
Post Construction
Tax Depreciation Estimates
• Gives prospective purchasers/investors an accurate figure of potential tax depreciation
• Helps to calculate the financial performance of a property investment
What is Depreciation?
Myth:You can only get depreciation
out of new or near new buildings.
WRONG!
Depreciation
• There is no age restriction on Plant and Equipment.
• So when you buy an old property these effectively start a new life.
• This is why old buildings still have depreciation benefits.
Depreciation
Depreciation may include:• The Building and built surrounds
(i.e. carport)• Plant and equipment (i.e. hot
water system)• Furniture• Where in a unit block with Body
Corp, common areas
Depreciation Example 1Furnished Unit Block
$385,856 over 9 years. They even depreciate the egg cups!
Depreciation Example 2Brand New Block of 10 x 1 Bed
Units
$81,000 first year!!!
Depreciation Example 3Old Block of 2 Flats
Scrapping value $15,000
Depreciation Example 4Old Furniture for the Dump
$40k to Vinnies
Depreciation Example 5Old House
Even a 30 year old building has
$54,178 of deductions!
Summary
• Depreciation is a paper loss only• You get a tax break for this!• MUST be done by a QS, NOT accountant• Applies to old and new• Can be back dated 2 years• If you are an investor and haven’t got a
depreciation schedule, we’ve just made you money!
What did you learn today?
Renovator not Ruinmaker The Reno KingsMaximizing Rent and Renting it FastColleen SutherlandInvestor Profile Matt CosgroveTax, Structures & Asset Protection Warren BlackFinance Kerri BurnessProperty Strategies The Reno KingsBrilliant Bathrooms & Killer Kitchens Paul EslickDepreciation The Reno Kings
TOMORROW: DAY 3 ADDING TREMENDOUS VALUE
The Reno Kings Adam Jones Investor Profile
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