What is a Property Report

If your residential property was built after 1985 your accountant is not allowed to estimate the construction costs. Tax Ruling 97/25 issue by the Australian Taxation Office (ATO) has identified Quantity Surveyors as properly qualified to make the appropriate estimate of the construction costs, where those costs are unknown. A trained Quantity Surveyor will ensure all depreciable items are noted and photographed. This guarantees you won’t miss out on any deductions. The documentation can then be used as evidence in the event of an audit. It’s very common for Quantity Surveyors to liaise directly with the tenant or property manager in order to cause minimal disruption to the tenant. The best time to get a Quantity Surveyor to inspect your property is immediately after settlement and hopefully just before the tenant has moved in.

It is clear that depreciation of investment property is a complex topic. Yet if done correctly it can provide significant tax deductions to the investor.

There are many benefits of having a property report, including:

• You only need to get the depreciation schedule produced once and it should contain expected depreciation amounts for up to 40 years;
• Some companies offer a money back guarantee on the cost of the report if you don’t get at least double the cost of the report back in your first tax return;
• The cost of the report itself should be tax deductible;
• The best time to get a depreciation schedule created is when you settle your investment property, but it can be done at any time, and even on very old properties (though if it was built before 1985 you might only be able to claim on plant and equipment); and
• Your accountant may even be able to claim depreciation backdated by up to two years, so you can recoup some additional cash back on previous years’ tax returns.

The cost of the Sydney property report varies by company and the size, location and other factors to do with your investment property.

A good quantity surveyor’s property report should include:

• Detailed inventory of all of your property’s Depreciating Assets together with Capital Works allowances
• Calculations showing and comparing both valuation methods, enabling your accountant to choose the method best suited to your particular situation
• Calculations taken pro-rata for the first year of ownership, so you are claiming your entitlement only and not any private use or use before you owned the property.
• Investor Assist recommends and works with the following depreciation and quantity surveying specialists with offices in Perth:
• BMT Tax Depreciation Quantity Surveyors
• Depreciation Professionals (DEPPRO)

 The ATO provides technical detail but that does not help the average investor who would need to take significant time learning the legislation and visiting their property to record the necessary information. Even then it can be next to impossible for an untrained person to capture all of the assets and correctly categorise them, identify additions to a property, or work out historical construction expenses. There is a large risk that significant deductions will be missed, or mistakes will be made that will require correction later on. That is why a Sydney property report is a must.