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Presentation transcript:

Depreciation | |

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

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

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

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

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

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.

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

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

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

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

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

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

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!

What did you learn today? Renovator not RuinmakerThe Reno Kings Maximizing Rent and Renting it FastColleen Sutherland Investor ProfileMatt Cosgrove Tax, Structures & Asset ProtectionWarren Black Finance Kerri Burness Property StrategiesThe Reno Kings Brilliant Bathrooms & Killer KitchensPaul Eslick DepreciationThe Reno Kings

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

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