I’ve just purchased a very run-down property and it needs a new kitchen & bathroom. Should I purchase a depreciation report? If so, how can a depreciation report help me with writing off older equipment?
With any existing kitchen and bathroom, although that may seem quite old, there may indeed be some residual value in them to depreciate. A cook top whether it is old or not, is still valuable as long as it is working wouldn’t you agree? Consequently you can still claim whatever value is left. That’s where a quantity surveyor’s expertise comes in handy with writing off older equipment & building assets.
It is critical to mention that should you wish to demolish the existing kitchen for the purposes of upgrading to a new kitchen, as an investor you are entitled to claim the existing items as an immediate write-off where a quantity surveyor can help you do so with a scrapping schedule. That means instead of depreciating an old kitchen valued at $2,000 over the next 4 years, you are entitled to claim $2,000 immediately in the current financial year you removed the kitchen as a tax deduction. On top of that, a quantity surveyor can produce a new depreciation schedule for the new kitchen that can be claimed for 40 years.
It is important to get a quantity surveyor in BEFORE any demolition takes place or at least have a discussion with a quantity surveyor to ensure you maximize your tax deduction. Contact us!