F.A.Q

F.A.Q2020-09-14T16:58:36+10:00

The ability to maximise an investor’s tax deduction depends solely on the quantity surveyors’ library of project experience. It is the lengths we go to in order to identify what is between a property’s walls and floors that maximises the tax deduction.

We find that once clients are well-informed with the tax saving potential with a depreciation schedule, the cost of a report quickly becomes insignificant and rather inexpensive!

Taller buildings attract higher depreciation. The truth behind it.

Construction costs of a house is generally lower than a high rise apartment and typical items found in apartments such as lifts and fire services can add a great deal of costs which in turn provides higher tax deductions.

Why Choose Duo Tax?2020-10-15T13:11:06+11:00

Value

A single schedule provides 40 years of claim or the maximum entitled years. You’re guaranteed at least double our fee in depreciation in the first full financial year. We’ll even retrospectively help you claim on previous years you missed out on.

Experience

We’re Australia’s most reviewed and highest-rated Quantity Surveyors on Google and Facebook. Our Quantity Surveyors have served thousands of happy property investors. We’re registered tax depreciation specialists with the ATO and AIQS.
 

Team

With over 30 combined years of experience and a nationwide presence, our Duo Tax process focuses on the most aggressive form of tax depreciation, which means more cash in your pocket.
 

Fast

We offer free immediate and accurate over the phone estimates so that you can decide if it’s worthwhile. We guarantee that you’ll receive your tax depreciation schedule within 10 business days from payment – the fastest in the industry.
 

Our Reports

  • Simple, easy-to-read and results-focused

  • Approved by the ATO and the choice FOR thousands of accountants and advisors Australia-wide

  • Complete 40-year diminishing and prime-cost depreciation schedules

  • Includes capital loss schedule to reduce your capital gains tax

View our sample report
Do I need a new tax depreciation schedule every year?2020-10-15T13:11:00+11:00

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.

Why can’t my accountant prepare my depreciation schedule?2020-10-15T13:10:25+11:00

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.

As an example, a square metre of concrete slab may cost $100 in today’s market. A quantity surveyor would derive the square metre depreciation rate based on an understanding of costs that includes excavation of the area, provision of sand underlay, termite protection and concretor fees to finish the concrete.

The difference in the quality of a Quantity Surveyor is in the detail that they go through to get it tack sharp to claim as much of a deduction as legally possible – something that Duo Tax exceeds in. Our knowledge is extended across the country using the most up to date sources to reflect the variances in rates for the cost of supply and even labour.

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What are the methods of depreciation? diminishing value vs prime cost2020-10-15T13:10:34+11:00

Duo Tax Quantity Surveyors provides both methods of depreciation in our tax depreciation schedules (where applicable).

These are:

  • Diminishing Value
  • Prime Cost

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.

Given the complexity of the situation, investors would be wise to discuss their tax matters with their accountant to ensure that they’re getting the most out of tax depreciation for their investment property. At Duo Tax, our tax depreciation schedules provide both the prime cost and diminishing value depreciation schedules. They’re designed for both investors and accountants so that you can determine what is best for you.

Below is a comparison between two different methods of depreciation.

graphical comparison of prime cost depreciation methodgraphical comparison of diminishing value depreciation method

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Can first home owners claim depreciation?2020-07-09T16:17:14+10:00

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.

Can I claim depreciation on an old property?2020-10-15T13:12:17+11:00

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.

Depreciation Calculator

 

Can I claim office / commercial spaces and warehouses?2020-07-09T16:10:38+10:00

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.

What is a tax depreciation schedule?2020-10-15T13:11:40+11:00

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. In the space of property investing, these items are classified as either Plant and Equipment or Building. 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.

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How does the depreciation process work?2020-10-15T13:11:35+11:00

Obtain your tax depreciation schedule in  3 easy steps. 

1. Qualify Property

Call us and we will ask you a few simple questions to qualify your investment property.

1300 185 498

2. Order Schedule

Order over the phone or via our online form and we will begin preparing your depreciation schedule.

Order Here

3. Claim Deductions

Within 5-10 business days your personalised report will be delivered to you and your accountant.

Report Sample
I am an overseas investor, can I claim depreciation?2020-10-15T13:12:07+11:00

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 do I know If I can claim tax depreciation?2020-10-15T13:11:26+11:00

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.

Property Tax Depreciation Calculator
Can I claim renovations by the previous owner?2020-10-15T13:11:21+11:00

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.

What are the 9th May 2017 budget changes to tax depreciation?2020-10-15T13:11:14+11:00

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.

The legislation only affects plant and equipment (division 40) which means that all residential properties may still claim capital works (division 43).

Knocking down and re-building? tearing out a kitchen?2020-10-15T13:12:01+11:00

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.

For example an old kitchen with a residual value of $4,500 may still have another 3 years’ worth of depreciation but due to the demolition to reinstate a new kitchen, $4,500 is claimable in full in the current financial year. Speak to your accountant to ensure the circumstance is suitable for you and engage a quantity surveyor to depreciate it.

Does Duo Tax survey interstate properties?2020-10-15T13:11:57+11:00

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.

What is Division 40?2020-10-16T15:14:54+11:00

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.

Plant and equipment fall under the Division 40 asset class and are depreciated as per the following methods:

Immediate write-off

Eligible plant and equipment items with a cost of $300 or less qualify for an immediate full deduction and have been applied accordingly in the calculations.

Low value pool

Includes assets that are purchased in the current financial year worth less than $1,000 (low-cost assets) and also those assets that have been acquired prior to this current financial year and currently worth less than $1,000 (low-value assets) are eligible for the low-value pool; these are depreciated as follows:

  • 18.75% in the first year (applicable to low cost assets only)
  • 5% in the subsequent years (applicable to all assets less than $1,000)

Effective life depreciation

For any other items that do not fall within the above criteria as either low-value pooled items or immediately written-off, they will be depreciated as per the effective-life schedule.

2017 Budget

The Federal Budget announcement for 2017 has proposed changes to claims of depreciation that may affect Australian Residential Property Investors whom are purchasing property after 7:30pm on the 9th of May 2017. At time this article was written, Duo Tax Quantity Surveyors are not aware of this proposed legislation being formalized. However, we do inform all our clients of the possibility of this coming to fruition and how it will affect them.

What is Division 43?2020-10-15T13:11:45+11:00

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.

In some cases, the Division 43 component will not be applicable to your property if it was constructed prior to 15th September 1987 or the structural improvements made on your property occurred prior to 27th of February 1992. It is worth mentioning that the only method of depreciation for any capital works is via the prime cost method.

In cases where the property is used for other purposes such as commercial or manufacturing, the cut-off date for claims of depreciation on the construction cost (Division 43) differs that the asset owner may also claim 2.5% between 20th July 1982 through to 21st August 1984.