Frequently Asked Questions

Q. What is the difference between plant and equipment and the building write-off allowance?
A. 

Plant and equipment items are basically items that can "easily" be removed from the property as oppose to items that are permanently fixed to the structire of the building. Plant items also include items that are mechanically or electronically operated, even though they can be fixed to the structure of the building.

Plant and equipment items include (But are not limited to):

  • Hot water systems
  • Carpets
  • Air conditioning systems
  • Ovens
  • Cooktops
  • Rangehoods
  • Dishwashers
  • Automatic Garage Door motors
  • Furniture - freestanding
  • Vinyl flooring
  • Window Furnishings - Blinds and Curtains

The Building write off Allowance is based on historical building costs and includes things such as the bricks, roof, mortar, walls, foundations, electrical works etc.
Q. If my property was built before 1985, is it too old?
A. 

No, it is not. Your investment property does not have to be new, both new and old properties will attract some deprecation deductions.
Q. What is the difference between Prime Cost and Dimishing Value methods of depreciation?
A. 

Two methods can be applied when depreciating property, the Diminishing Value and Prime Cost method. The property investors intentions in relation to their property will determine which depreciation method will be most suitable for them.

Under the diminshing value methodthe deduction is calculated as a percentage of the balance you have left to deduct. If you claim using this method you are claiming a greater proportion of the assets cost in the earlier years of the effective life.

Under the prime cost method the deduction for each year is calculated as a percentage of the cost. If you claim using this method you are claiming a lower but more constant portion of the available deductions over the life of the property.
Q. Can't my Accountant do my tax deprecation schedule? Do I need a professional Quantity Surveyor to assist in the preparation of my Tax Depreciation Schedule?
A. Yes, an accountant may assist, however under Division 40 & 43 of the Income Tax Assessment Act, the ATO encourages the Self-Assessment Scheme whereby the assitance of a Professional Quantity Surveyor is required in order to estimate accurate plant and building costs.
Q. What are the benefits of getting a Tax Deprecation Schedule
A. 

By obtaining a Depreciation.com Tax Deprecation Schedule, you will maximise the amount of non-cash deductions you will be able to claim in your tax return on your investment property.  A tax depreciation schedule will differentiate between depreciable plant items and any allowance claimable on the building works.