All Your Tax Depreciation Questions Answered!

What is Depreciation?
Under Australian Taxation Law, it is recognised that an income producing property contains elements that can be claimed due to their wear and tear, and the effective life of that item. For example carpet has an effective life of 10 years, so you can claim the cost of the carpet at a rate per year.

Why do I need a report?
You have the opportunity to reduce your assessable income, and reduce the amount of tax that you are likely to pay. This in turn can significantly enhance your hard earned after tax dollars and maximise your cash flow.

Who is a Quantity Surveyor?
A Quantity Surveyor is a recognised professional who provides construction cost consultancy services. There are many things that a Quantity Surveyor can do for you, but most importantly, Quantity Surveyors are recognised by the Australian Taxation Office to be appropriately qualified to do the depreciation report for you.

Why not use my Accountant?
We work in conjunction with your accountant. Once we have completed the schedule for your investment property, your accountant will then use it to minimise your assessable income.  A Quantity Surveyor is a specialist in construction and the most appropriately qualified individual to produce your report.

What is Prime Cost Method of Depreciation? 
Otherwise known as the straight line method ie you receive the same deductions per year throughout the forecast

What is Diminishing Value Method of Depreciation? 
Allows for maximum deductions in the first year, and then gradually decreases the deductions over their respective ‘tax’ life.

Which of the above methods should I use and when? 
Talk to your accountant. They are the best qualified to give you advice on your financial matters.

Who will be completing my report? 
Quantity Surveyors are recognised as appropriately qualified individuals by the Australian Taxation Office to undertake a tax depreciation schedule.  One of our Quantity Surveyors will sign off on your report.

How long will it take to do my report? 
It depends on which option you choose.  Generally between two to three weeks once we have received all the required documentation.  Please allow for an extended timeframe nearing the end of each financial year.

Are your fees Tax Deductable?
Yes entirely, including the GST.

Can you depreciate against a pool?
Yes.  In the case of an in ground concrete pool you are able to claim the 2.5% Capital Allowance on the concrete and a higher rate for the Filtration System.

How often should I get a Depreciation Report done?
Generally you should have your report updated when you upgrade your premise although your accountant can advise you.

Roughly how much will I be able to claim in Depreciation each year?
This figure will be dependent on many factors including the age of the property and the original construction cost.  Generally, the newer the property and the higher the construction cost the more depreciation you will be entitled to.

Does your report include the 2.5% building depreciation?
Yes, most definitely.  Subject to Tax Rulings in relation to the age of your property.

How does the QS come up with the prices that we can claim on particular items?
By researching the market value, using published cost guides and bench-marking against over 9000 past jobs on our database.