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Episode 20: Depreciation – It’s Much More Than 1,2,3.

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25 Sep, 2020
Philip Robison

This week my guest is the Director at SJB Quantity Surveyors for the past 10 years a National Firm with Locations in Melbourne, Sydney, Gold Coast, Adelaide and Darwin. He is a Member of the Australian Institute of Quantity Surveyors is Registered with the Tax Practitioners Board. My guest has been a Quantity Surveyor for over 26 years. He’s worked for National Quantity Surveying firms and Tier 1 and Tier 2 Commercial Builders. In that time he has been involved in all types of construction projects ranging in value from $50,000 to $300 million. Welcome Steve Blank.

Depreciation is a term most people are unfamiliar with so with that said I ask Steve what is Depreciation?

When it comes to talking about numbers and the possibility of Tax Deductions most people would usually go to their Accountant but I’ve got a feeling you’re going to tell me only certain professionals are able to prepare a Depreciation Schedule? Who can prepare one and who can’t?

We unpack what is Tax Depreciation when it comes to an Investment Property?

We explore the different types of Depreciation namely Diminishing Value Method & the Prime Cost or Straight-Line Method.

Steve shares how these methods are comprised and how you go about breaking down the Plant & Equipment Items.

Steve explains what is meant by Capital Works or Building Allowance, how long a Depreciation Schedule lasts and whether the Value of the property or the purchase price affects Tax Depreciation.

Can you claim the full amount of available depreciation in the first year?

Steve a lot of people would want to know if a Depreciation Schedule

can be backdated?

Governments are always tinkering with Legislation and the area of Depreciation is no exception. Steve takes us through the significant dates and changes.

There are some things that cannot be claimed and Steve shares the most common ones with us.

We look at the impact of transferring a property from one owner to the next and whether a Depreciation Schedule can be transferred.

So what if I renovate my property how will this impact the Depreciation Schedule and what is claimable?

As I buy Regional Properties across Australia for our clients, I ask Steve to share examples when you would recommend doing a Depreciation on an Established dwelling and some when it wouldn’t be worthwhile doing one?

We discuss renovating a property in the future and whether a new Depreciation Report would be required and importantly how long it typically takes to prepare a report.

We also look at where you can get big wins when it comes to having a Depreciation Schedule and that’s with New Builds and Steve shares just how much can be claimed against your Taxable Income…It’s quite staggering!

With the world going through so much change socially and economically we discuss whether there is anything on the horizon in terms of Depreciation that investors should be aware of.

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