Frequently Asked Questions
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 to help them maximise their tax deductions each year.
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.
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.
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.
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.
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.
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 lived 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 the company or managed funds.
The capital works (division 43) renovations completed by previous owners are claimable if they were completed after the 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.
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.
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.
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 web form or over the phone, and we will begin preparing your depreciation schedule.
Thirdly, you can claim deductions, we will deliver your personalised depreciation report to you and your accountant within 5-10 business days.
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.
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 the 1st of July 2017. You can use our calculator to receive a rough estimate of how much you can receive if you are able.
If you are buying a first home and aim to reap the government incentives and benefits, don’t make the mistake of many thinking 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.
The ATO prescribes two methods to calculate depreciation:
- The prime cost method: under the prime cost method, also known as the straight-line depreciation, you calculate the decrease in value of an asset over its effective life at a fixed rate each year.
- The diminishing value method: under the diminishing value method, also known as the declining balance depreciation method, you claim depreciation at a higher depreciation rate in the first few years of property ownership. As a result, the depreciation deduction value will decrease each year until the asset value runs out. Using low-value pooling, you can also increase the claim on items valued below $1,000. A Duo Tax Depreciation Schedule will automatically take all this into account for you.
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, who are Registered Tax Agents with the Tax Practitioner’s Board.
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.
Our construction cost calculator is based on gross floor area. This is the total floor area that’s fully enclosed across all floor levels. This should be measured based on the external measurement of the building to account for the thickness of the walls.
This includes generally covered areas of floor space, such as:
- Lift shafts
This includes generally uncovered areas of floor space, such as:
- Porches and patios
While every effort is made to ensure data and information are up to date, the calculators are for indicative purposes only and should not be used for any purpose other than an estimation of the average cost. If you’d like an accurate estimation, get in touch with the Duo Tax team for a free estimate from a quantity surveyor.
Quantity surveyors are qualified to provide cost reports and accurate estimations once detailed plans and data have been submitted. The cost calculator is designed to provide you with an estimate based on the information provided.
Yes, we can. We can work closely with architectural drawings to prepare elemental cost plans as well as detailed cost plans with consideration for budget and value. If you’re a home builder, we can provide effective cost planning to achieve realistic estimates. The other benefit is that our quantity surveyors can constantly monitor your project and will help identify overspending on your budget at an early stage to be able to take prompt action.
Yes, Duo Tax can prepare a tax depreciation schedule for your overseas international investment property provided it was built after 1990.
The cost of property valuation in Brisbane varies depending on the property’s size, location, and purpose of the valuation. Contact us for a detailed quote.
A certified property valuer ensures that the valuation is accurate, impartial, and in line with industry standards.
The current market value is determined by analysing recent sales data, property condition, location, size, and local market trends.
Duo Tax offers a blend of experience, local market knowledge, and a commitment to providing accurate valuations.
House valuers are specialists in residential property valuation. Unlike general valuers, who might cover a broad spectrum of property types, house valuers have a keen understanding of the residential market, its trends, and the unique features that can influence a home’s value.
They are adept at identifying the subtle nuances of homes, from architectural styles and renovations to the impact of local amenities and schools. This specialisation ensures that homeowners receive a valuation that truly reflects the current market conditions and the unique attributes of their property.
Furthermore, with the ever-changing dynamics of Brisbane’s residential market, having a valuer with a focused expertise ensures that valuations are both accurate and relevant.
Not all valuers are registered. It’s essential to choose valuers, like those at Duo Tax, who are registered and certified to ensure credibility and accuracy.
Our certified property valuers utilize a range of valuation methodologies to determine a property’s value, including the market, income, and cost approaches.
We analyse comparable property sales, capitalization rates, replacement costs, depreciation, and current market conditions. Location, property size, age, condition, amenities, zoning, and neighbourhood desirability are also key factors. Our valuers combine proprietary models, local market expertise, and on-site inspections to give clients a well-researched fair market value estimate.
While we offer a range of online resources for a genuinely reliable valuation, we recommend contacting our team of certified appraisers for a customised appraisal report. Our in-depth on-site inspections, local market knowledge, and consideration of unique property characteristics result in highly accurate fair market value opinions tailored to each property.
Australian property prices are relatively high globally, with major cities like Sydney and Melbourne ranking among the most expensive housing markets worldwide. Limited land supply and strong population growth have increased prices over the decades. However, Australian prices are moderate compared to other countries with extremely high costs, like Hong Kong or Monaco. Prices vary widely between Australian cities and regions based on economic factors and desirability.
Yes, Sydney residential property values are among the highest in Australia and continue to rise faster than other major cities. Limited land supply, strong job growth, high wages, an influx of foreign investment, and Sydney’s standing as Australia’s economic engine have created enormous demand. Median house prices in Sydney are approximately 40-60% higher than in Melbourne, Brisbane, Perth or Adelaide. However, there is significant variation based on specific suburb, property type, land size and proximity to the CBD.
Online automated valuation models can provide a general ballpark figure but have limitations in accuracy. They use a computer algorithm and public data, not an on-site inspection by a qualified valuer. For a truly reliable valuation, we recommend contacting our team of certified property valuers. Our valuers combine proprietary models with local area expertise, historical data analysis and detailed on-site inspections to provide a precise, fair market valuation. Our highly customized reports consider the unique attributes of each property.
The most accurate way to determine your home’s current market value is to contact a certified property valuer for a professional appraisal. Our experienced valuers take into account the location, size, age, condition and features of your property along with recent comparable sales and area market trends. We’ll inspect your home in person and provide a detailed fair market valuation report. This customised appraisal by a local market expert provides the real picture of what your home would likely sell for in today’s market.
As a leading property sales information provider, our company sources extensive data on property transactions across Australia to deliver valuable intelligence to our clients. By leveraging our comprehensive national databases, updated regularly, we can supply detailed sales and property information, including sold prices, property characteristics, trends, and analytics to inform property valuations, pricing, and investment decisions.
While real estate agents can provide general estimated valuations, we recommend obtaining an official appraisal from a certified property valuer for an accurate and unbiased property value.
Unlike accredited valuers, real estate agents ultimately have a vested interest in either buying or selling the property in question. Their valuations may be inflated to gain a higher selling price or lowered to make a quick sale.
Additionally, agents often use automated valuation models which lack important on-site inspection details. Certified valuers combine proprietary models with extensive local market knowledge and detailed physical property assessments.
For due diligence such as buying, selling, financing or investing, an independent valuation from a qualified expert provides a true fair market value opinion. Their extensive training and valuation methodology helps remove any conflicts of interest.
Once detailed plans and data are submitted, quantity surveyors can provide cost reports and accurate estimations. The calculator is designed to provide you with an estimate based on the data you provide.
Yes, we can. We can use architectural drawings to create cost plans based on budget and value. If you’re a home builder, we can provide effective cost planning to achieve realistic estimates.
The other benefit is that our quantity surveyors can constantly monitor your project and help identify overspending at an early stage to take prompt action.
Many things affect how much a building costs. These include the design, materials, location, rules, challenges, and size. These elements can significantly impact the overall cost and should be considered in the initial planning stages.
No, the Duo Tax Construction Cost Calculator only estimates building and construction costs. Land prices need to be considered separately and added to the construction cost for a comprehensive budget.
You can save costs when building a house by opting for a simpler design, choosing cost-effective materials, managing the project efficiently, and ensuring thorough planning to avoid unexpected expenses. Hiring skilled workers can prevent expensive errors and keep the project within budget.
The cost to build a house per square meter varies a lot based on location. It depends on things like labour, materials, and fees. Talk to builders or use our cost calculator for Sydney to get accurate numbers.
Labour costs are a significant portion of the total cost of building a house. The factors that can influence them include the build’s location, project complexity, and worker demand. High demand or a shortage of skilled labour in a particular location can increase labour costs.
Material costs can substantially affect the overall expenses of building a house. Choosing materials, such as high-end finishes or rare woods, can increase costs.
Additionally, the availability and transportation of materials, influenced by factors like global market conditions and local supply chains, can also impact the budget. Strategic planning and alternative material selection can help manage these costs effectively.