Frequently Asked Questions

Why choose Duo Tax Quantity Surveyors?
As a team of property investors ourselves, we understand that every dollar counts. Having your own property is a dream that many Australians are working hard towards. Investors toil away for years to put away savings on a deposit for their first property purchase. Duo Tax Quantity Surveyors are Australia’s most reviewed and highly-rated Quantity Surveyors. As the country’s fastest-growing property tax depreciation service, thousands of investors have entrusted us in helping them maximise their tax deductions each year.
What is Property Tax Depreciation?
Depreciation is the wear and tear that occurs as things get older. As items get older, the value of these items also decrease in value. This is called depreciation. When it comes to your investment property, these items are classified as either Plant and Equipment or Capital Works. The wear and tear of either plant and equipment or building in an investment property is called tax depreciation. Depreciation that you as an investor can claim as tax deductions enabling also increased tax refunds. The ATO prescribes two methods – prime cost method or diminishing value method. Both that can be used to claim on your property depreciation.
What is Division 43?
Division 43 is the category which addresses the building write-off component of your property. The historical construction costs include fees for preliminary items such as design fees, engineering and building approval costs. Where actual costs are not known, a quantity surveyor has estimated this amount by determining the appropriate costs for the building/structural improvement of the asset as at the date it was constructed. The percentage rate at which the building depreciates is dependent upon when construction commenced and the intended use of the building for i.e. commercial, manufacturing or residential purposes. This percentage will either be 2.5% or 4% and has been applied accordingly with respect to the information provided to us.
What is Division 40?
Division 40 is the category which covers assets that are easily removable from a building rather than attached or fixed. These include appliances and furnishings. Each item of plant or equipment within your property has an effective life measured in number of years. The effective life is determined by the tax commissioner under the latest Taxation Ruling. It is used to calculate the assets decline in value.
Does Duo Tax survey interstate properties?
Whether your property is in the heart of the city of Sydney or as interstate as the Great sandy desert, we can depreciate your property. We service Australia-wide with surveyors in every state. Call us on 1300 185 498 if you feel like it would be a problem for us to complete your report and we will be happy to discuss details before proceeding with your purchase.
Knocking down and re-building? tearing out a kitchen?
Before you demolish and destroy any existing plant and equipment or structural elements of the property such as an old kitchen and appliances, check with us to see if there is any residual value worth writing off as a loss. Most often we find lots of deductions that can be claimed IMMEDIATELY that financial year.
What are the 9th May 2017 budget changes to tax depreciation?
The Federal Government legislated new laws for properties purchased after the 9th of May 2017 that ultimately affect depreciation claiming for second-hand plant & equipment (division 40).* Brand new properties rented immediately are not affected. The plant & equipment in a property must now be brand new and never used before (and the property rented prior to the 30th of June 2017 if purchased second-hand) to be eligible to claim for depreciation. If the property is purchased second-hand after the 9th of May 2017, you cannot claim any of the existing depreciation in the property. However, any brand new items you install in the property for rental purposes will be claimable, provided the item was installed after moving out of the property. The second scenario is where you purchased a brand new property, if you live in the property for any amount of time before renting, the plant & equipment items inside are now considered second-hand and therefore no longer eligible to be claimed. *Does not affect company or managed funds.
Can I claim renovations by the previous owner?
The capital works (division 43) renovations completed by previous owners are claimable if they were completed after 27th of February 1992. As for plant & equipment (division 40), these items are only claimable if you purchased the property before the 9th of May 2017. If you purchased after this date, they are considered second-hand and are therefore no longer eligible to be claimed for depreciation.
How do I know if I can claim depreciation?
We have created a simple tool for investors to use to determine if you can claim tax depreciation including an estimate of how much you may be entitled to.
I am an overseas investors, can I claim depreciation?
If you are an overseas investor and looking at acquiring an investment property for the purpose of letting it out to tenants, by law you must lodge an Australian tax return. As such, a depreciation schedule will work favourably for you. Speak to an accountant for clarification on your tax obligations.
How does the depreciation order process work?
First you need to qualify the property, give us a call and we will ask you a few simple questions to qualify your investment property. Second, you order a schedule via our webform or over the phone and we will begin preparing your depreciation schedule. Thirdly, claim deductions, we will deliver your personalised depreciation report to you and your accountant within 5-10 business days.
Division 43 is the category which addresses the building write-off component of your property. The historical construction costs include fees for preliminary items such as design fees, engineering and building approval costs. Where actual costs are not known, a quantity surveyor has estimated this amount by determining the appropriate costs for the building/structural improvement of the asset as at the date it was constructed. The percentage rate at which the building depreciates is dependent upon when construction commenced and the intended use of the building for i.e. commercial, manufacturing or residential purposes. This percentage will either be 2.5% or 4% and has been applied accordingly with respect to the information provided to us.
Can I claim office/commercial spaces and warehouses?
In these properties, unlike a house, if you purchase and own the space to run your own business, the ATO will allow you to claim the depreciation on these as a deduction. If you lease out a space and have completed a fit-out to operate your business, enquire with us to ensure you get the deductions. Speak to your accountant to get proper advice suitable for you.
Can I claim depreciation on an old property?
It is a common misconception that existing properties do not yield any worthwhile depreciation. At Duo Tax, we are actively educating investors on the relevant laws and tax deductions available within investment properties and find that the above is not always the case. The ATO allows you to claim building depreciation (division 43 – capital works) on all residential investment properties built after September 1987. If built before 1987, there still is a chance to claim depreciation if the property was renovated after 1992. The plant & equipment (division 40) is only claimable on older properties if you purchased the property before the 9th of May 2017 and rented it before 1st of July 2017. You can use our calculator to receive a rough estimate on how much you can receive if you are able.
Can first home owners claim depreciation?
If you are buying a first home and aim to reap the government incentives and benefits, don’t make the mistake of many and think you aren’t entitled. If at any stage you decide to switch the asset from a home to an investment property, as soon as it is put on the market for rent you are entitled to start claiming the deductions.
What are the methods of depreciation?
Duo Tax Quantity Surveyors provides both methods of depreciation in our tax depreciation schedules (where applicable). These are diminishing value method and prime cost method. These methods use different calculations to determine how quickly the items in the property are depreciating. You are free to use either method but you are unable to switch between the two once you have begun depreciating. Every investor’s situation is different. Whether you’re buying a brand new property, a second-hand property, living in it or renting it out, these circumstances all have a part to play in deciding which depreciation method to use.
Why can't my accountant prepare my depreciation schedule?
Quantity Surveyors are considered economists of the building sector. As accountants are unable to determine the cost of construction, it is then left up to the quantity surveyor to provide these estimates of cost. Naturally then, they are in the best position and are trusted to provide reports. These reports are accepted by Quantity Surveyors whom are Registered Tax Agents with the Tax Practitioner’s Board.
Do I need a new tax depreciation schedule every year?
Fortunately not, our tax depreciation schedules will last the full 40 years of depreciation (where applicable). So, you only need to purchase one for each investment property you own. We make sure to capture all the depreciation available to you. If you have lost your schedule, email us and we can send you another copy.
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