Frequently Asked questions

Can my accountant prepare my depreciation schedule?

Thrifty Tax Depreciation is asked this question a lot. An accountant is able to prepare a depreciation schedule for an investment property where all costs are provided by the builder for example as below.

Oven – Miele H series 2860$3,200
Air-conditioning unit 2.5kW Panasonic$1,200

The trouble is that all new builds do not always come with a complete asset breakdown as below and the Building Contract is often shown as a ‘lump-sum’ cost that is provided to the purchaser or investor. i.e. you may find a contract that will show $250,000 and show all the items that are included but without value. Where Thrifty Tax Depreciation can help is that we can estimate the cost of each asset as per our legal capabilities as set out by the ATO.

Shown below is the benefit of a quantity surveyor over an accountant. An accountant will only be able to provide a limited rate of depreciation of 2.5% on the whole building contract as per division 43 as no asset values are provided to the accountant.

For example, if the building contract shown is $250,000.00, then the accountant will depreciate your rental property as follows:

Building Value$250,000
Rate of depreciation as per division 432.5%
Year 1$250,000 x 2.5% = $6,250
Year 2$6,250
Depreciation claimed in 2 years$12,500

A quantity surveyor’s depreciation schedule can be seen as below based on the same scenario:

Building Value$180,000
Rate of depreciation as per division 432.5%
Rate of depreciation for air-con, carpets etc10-15%
Year 1: building$180,000 x 2.5% = $4,500
Year 1: plant and equipment$7,000
Year 1: total depreciation$11,500
Year 2: building$4,500
Year 2: plant and equipment$5,500
Year 2: total depreciation$10,000
Depreciation claimed in 2 years$21,500

As you can see, a Thrifty Tax Depreciation Schedule prepared for a rental property that costs $250,000 to build will yield $21,500 more in depreciation a report prepared by an accountant where a standard Building Contract is provided. The clear advantage that Thrifty Tax Depreciation has is that it is able to value the plant and equipment in a rental property by professional assessment; something that is not legally achievable by an accountant.

The case is also similar where a property investor purchases an existing property with second-hand plant and equipment, a quantity surveyor will be able to assess for depreciation for old assets regardless of age. We have completed tax depreciation schedules for clients with properties as old as 1965. See ‘Can I claim depreciation an existing property? Order your report today!

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Thrifty tax is an Australian owned quantity surveying company which specialises in tax depreciation. Our vision is to provide high-returning, ato compliant tax depreciation schedules for property investors at affordable prices.

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