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Depreciation

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Depreciation

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  1. Depreciation www.renos.com.au | info@renos.com.au | 1300 550 656

  2. What is Depreciation? • Hidden cash flow for property investors • As buildings get older items wear out – they go down in value • You can get a tax benefit for this! • You can’t claim depreciation for your PPOR

  3. What is Depreciation? Must be carried out by a Quantity Surveyor (QS) then applied by your accountant.

  4. Pre Construction Construction Post Construction What is a Quantity Surveyor? A specialist in building measurement and cost estimating

  5. Tax Depreciation Estimates • Gives prospective purchasers/investors an accurate figure of potential tax depreciation • Helps to calculate the financial performance of a property investment

  6. What is Depreciation? Myth: You can only get depreciation out of new or near new buildings. WRONG!

  7. Depreciation • There is no age restriction on Plant and Equipment. • So when you buy an old property these effectively start a new life. • This is why old buildings still have depreciation benefits.

  8. Depreciation Depreciation may include: • The Building and built surrounds (i.e. carport) • Plant and equipment (i.e. hot water system) • Furniture • Where in a unit block with Body Corp, common areas

  9. Depreciation Example 1Furnished Unit Block $385,856 over 9 years. They even depreciate the egg cups!

  10. Depreciation Example 2Brand New Block of 10 x 1 Bed Units $81,000 first year!!!

  11. Depreciation Example 3Old Block of 2 Flats Scrapping value $15,000

  12. Depreciation Example 4Old Furniture for the Dump $40k to Vinnies

  13. Depreciation Example 5Old House Even a 30 year old building has $54,178 of deductions!

  14. Summary • Depreciation is a paper loss only • You get a tax break for this! • MUST be done by a QS, NOT accountant • Applies to old and new • Can be back dated 2 years • If you are an investor and haven’t got a depreciation schedule, we’ve just made you money!

  15. What did you learn today? Renovator not Ruinmaker The Reno Kings Maximizing Rent and Renting it Fast Colleen Sutherland Investor Profile Matt Cosgrove Tax, Structures & Asset Protection Warren Black Finance Kerri Burness Property Strategies The Reno Kings Brilliant Bathrooms & Killer Kitchens Paul Eslick Depreciation The Reno Kings

  16. TOMORROW: DAY 3 ADDING TREMENDOUS VALUE The Reno Kings Adam Jones Investor Profile

  17. Write down your questions