TAX DEPRECIATION

JR-QS experiences in building construction and knowledge of tax depreciation matters would ensure maximum benefit to our clients.

All site inspection is conducted by highly qualified and experienced quantity surveyors of more than 10 years working experiences to ensure all depreciable assets are identified.

Unlike many other firms, JRQS does not sub contract site inspection work or utilise non AAIQS members to carry out site inspection. All site inspections will be conducted by in-house quantity surveyors who are an associate member of the Australian Institute of Quantity Surveyors.

JR-QS photograph (where required) the property for audit purposes. All properties will be inspected; in exceptional are new developments where units are similar or typical.

Our fee is highly competitive and our depreciation report is in a detail format to suit your accounting and tax requirements.

No, all properties are entitled to some form of depreciation regardless of its age i.e. even if your building was built prior to 1985.

No building allowance is available for residential building constructed before 18th July 1985 or 21 August 1979 for hotel style accommodation and 20/7/82 for non residential building.

However, there will be some form of depreciation available to the depreciable assets of the property.

Structural improvement carried out after 27/2/1992 is entitled to some form of depreciation and capital works deductions respectively.

Please contact JR-QS for more information. JR-QS provides an obligation free searches and advice. There will be no service charge (except for council and other searches fees, where applicable) for this advice.

Yes, a depreciation report can be prepared to allow an individual to easily recover missing depreciation benefits (up to a period of 2 – 4 years) by amending previous tax return. Your tax adviser should be able to advise you further on this matter.

Claiming depreciation offset your total taxable income, and reduces the tax you have to pay in today dollars. This will “free up” your cash flow and enable you to repay your mortgage or debt in a shorter duration.

Claiming capital works deduction increase your capital gain tax liability upon realisation of your property. However, claiming deductions on depreciable assets do not have any effect on the capital gain.

The good new is that there is a significant “dollar” value in the depreciable assets deduction, especially in the first 5 years, which all property investors should take advantage of.

The distinction is between repairs and improvement. Improvement is dealt as capital works, whereas repairs are dealt with as a normal outgoing expense.

Restoration of a leased premise upon vacation by the previous tenant is capital expenditure.

All maintenance or repair works carried out during leasing period need to be examining on case by case basis by our surveyor i.e. if the works are of repairs or improvement nature.

No. With hotel, motels and guesthouse, the taxpayer can claim the 4% rate. With apartments and units, the taxpayer must own 10 or more in the same complex before they can use the 4%.

Yes, in fact a large portion of tax benefit relates to the common areas.

Unlike some firms, JR-QS conducts mandatory inspection of all properties especially the common areas in an apartment or high-rise block of units. e.g. of depreciable items in common areas include but not limited to FHR, Fire Extinguisher, EWIS, Auto Access Control, Sump Pump, CCTV, Smoke Detection & Alarm System, Hydrant Pump, Pool/Spa Equipment, Gym Fitout and Equipment, MATV, etc. etc. etc.

The answer is “No”, for a numbers of reasons highlighted below:

1. First, this unprofessional practise is not recommended and is discouraged by the Australian Institute of Quantity Surveyors and the tax office.
2. There is question of “who bear the risk?” in the event of an audit by ATO; as in this case you are also a party in the preparation of the tax depreciation schedule. Wouldn’t it be better for you to leave it to the “professional QS” to take the whole responsibility, as they are cover by their indemnity insurance whereas you are not?
3. For a minimum saving in fee, you may actually end up losing more. Unless you have building construction and tax depreciation knowledge, otherwise you are probably not in the best position to identify all depreciable assets, especially in the common areas (see Q. 8 above). Without site inspection, it is difficult to place a dollar value on the depreciable assets and to ensure maximum benefits are available to you.
4. No firm should claim that they can prepare a comprehensive tax depreciation report without inspecting the property. Remember, our fee are tax deductible so real difference in fee is minimal

Yes, an investor who is unable to ‘show a business’ cannot claim depreciating assets based on common law principals, but is only able to use the definitions of “plant” – articles/machinery!!

Yes, we have associate offices in Victoria, Queensland and Western Australia.