The Property Depreciation Experts - Washington Brown · This depreciation schedule has been prepared for the sole purpose of depreciation claims to reduce investment owner's taxable

Sample Depreciation Report - Unit

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The Property Depreciation Experts

Office Locations:Sydney | Melbourne | Brisbane | Canberra Perth | Cairns | Adelaide | Hobart | Darwin

P: 1300 99 06 12 F: 1300 99 06 13 E: [email protected] W: www.washingtonbrown.com.au

9-Dec-16

PurchaserDelivered via E-mail FILE NO:76482

Dear Purchaser,

Sample Unit, NSW 2127

Thank you for choosing Washington Brown to prepare your depreciation report.

Enclosed is our assessment of depreciation for the above property based upon

the Diminishing Value method and the Prime Cost method.

You will need to choose which method of depreciation you would like to claim.

Factors which may impact on your decision include:

1. Whether you have ever lived in the property.

2. The length of time you intend to own the property.

Generally speaking, if the property has been an investment from the settlement

date - property investors tend to choose the Diminishing Value method. This

method enables you to claim the depreciation faster.

However, if you have lived in the property at any time, you may wish to

consider the Prime Cost method as it slows down the depreciation in the earlier

years.

We recommend you always confirm with your accountant or financial advisor

the method that best suits your individual circumstances.

Further information about these two different methods has been provided to

you in the following pages.

Once you choose your method of claim, you cannot alternate between the two

options.

1


The year-end summary pages of this Schedule contain essential

information that summarises the amount your can claim annually.

Washington Brown Depreciation Pty. Ltd. does not accept any contractual,

tortious or other form of liability for any consequences, loss or damage

which may arise as a result of any other person acting upon or using this

valuation.

Regards,

Washington Brown Depreciation Pty Ltd

Registered Tax Agent 26956002

2


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Thanks for choosing Washington Brown

3


Depreciation Schedule Fact Sheet

What is a depreciation schedule?

A depreciation schedule is a report supplied by a quantity surveyor after

inspection of an investment property. This report itemises fixtures and

fittings that can be depreciated and estimates their value. It also estimates

construction costs if these are not otherwise known.

What has the report been based upon?

We have based our assessment upon the information as provided, together

with the property inspection and our estimate of probable construction

costs.

What is this report used for?

This depreciation schedule has been prepared for the sole purpose of

depreciation claims to reduce investment owner's taxable income and may

not be used for any other purpose. This report will become void if you sell

this property. Future owners should contact this office to discuss any future

claims.

What is a depreciating asset?

A depreciating asset as defined in the Income Tax Assessment Act (ITAA)

1997 sect. 40-30(1), is an asset that has a limited effective life and can

reasonably be expected to decline in value over the time it is used.

The calculation of the amount of a deduction allowed with respect to a

depreciating asset in part depends upon the cost of that asset. The cost

has been determined by the amount you have paid for the depreciating

asset.

What is the Diminshing Value method of Depreciation

This method depreciates items more quickly up front. This method

recognises the fact that most Plant and Equipment items tend to lose a

higher portion of their value early on.

4


What is the Prime Cost method of depreciation?

This method evenly spreads out the depreciation you can claim on Plant

and Equipment items.

What is the Building or Capital Works allowance?

This deduction relates to the construction costs of the building itself

(concrete and brickwork etc.). This allowance is calculated at either 2.5%

or 4% per annum based upon the original construction cost.

What is Plant and Equipment?

Plant and Equipment refers to items within a building, such as ovens,

dishwashers, carpets and blinds. The Plant and Equipment allowances

comprise of a number of categories which are claimed at different

percentages over their effective life.

What is effective life?

Also known as useful life, effective life is the length of the life of an item of

Plant and Equipment in an investment property as deemed by the tax

office. Each item can be depreciated over a period of its effective life.

When does the $300 immediate write off apply?

You can claim immediate deductions (i.e. 100% of the cost price) for items

costing $300 or less.

What is a Low Value Pool Item?

Items which cost more then $300 but less then $1000 can be allocated to a

low value pool and are depreciated at a 37.5% per year under the

Diminishing Value Method.

What are design and professional fees?

These fees include architect fees, engineering costs and any other design

fees involved in creating a property.

5


What are builder's preliminaries?

These costs relate to items such as scaffolding, materials, handling

insurances and labour costs.

What are owner inclusions?

This relates to the work or additions that you made to your property after

settlement of the property.

What if I co-own my property?

Where depreciating assets are co-owned, the individual's interest (share) in

the asset is applicable. Each co-owner therefore must treat their

depreciating asset (their interest in the underlying asset) in accordance

with their own tax profile.

6


Property Address Sample Unit, NSW 2127

Purchase Price Of Property $650,000

Settlement Date July 1, 2016

Year Of Construction 2016

Your Property Details

7


CERTIFICATE OF DEPRECIATION

We hereby certify that the following costs in our opinion relate to the Plant and Equipment as

included within the Purchase Contract between the relevant parties. This certification is in

accordance with Division 40 of the Income Tax Assessment Act 1997.

We hereby certify that the following costs in our opinion relate to the Capital Works Allowance

as included within the Purchase Contract between the relevant parties. This certification is in

accordance with Division 43 of the Income Tax Assessment Act 1997.

The depreciation of the Plant and Equipment in this depreciation schedule has been determined

in accordance with the relevant legislation at the time of writing this report.

8


DEPRECIATION SCHEDULE

BASED UPON

THE DIMINISHING VALUE METHOD

This method depreciates items at a greater rate in the beginning. This method

recognises the fact that most plant and equipment items tend to lose a higher portion

of their value to begin with.

9


DATE: 9-Dec-16

JOB: 76482

DESCRIPTION VALUE CALCULATIONS

PURCHASE PRICE $650,000

BUILDING COST $258,866

ADD

BUILDERS PRELIMINARIES $38,027

ADD

PROFESSIONAL FEES $9,293

TOTAL CONSTRUCTION COSTS $306,187 $306,187

LESS

TOTAL INSTALLED COST OF PLANT & EQUIPMENT $25,338

LESS

ALLOWANCE FOR ITEMS NOT

ELIGIBLE FOR DEPRECIATION: $2,694

LESS

TOTAL VALUE OF LOW POOL ITEMS $2,938

SUB TOTAL $30,971 -$30,971

BUILDING ALLOWANCE – SECTION 43 (INITIAL STRUCTURE) $275,216

PROJECT: Sample Unit, NSW 2127

CLIENT: Purchaser

CONSTRUCTION SUMMARY - DIMINISHING VALUE METHOD

DEPRECIATION & BUILDING ALLOWANCES BASED ON THE DIMINISHING VALUE METHOD AS OUTLINED IN THE

NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES ) ACT1999.

AMENDMENTS TO INCOME TAX ASSESSMENT ACT 1997 BY

NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES) ACT 1999

(ACT 164 of 1999, ROYAL ASSENT 10 DECEMBER 1999).

10


PROJECT: Sample Unit, NSW 2127 DATE: 9-Dec-16

CLIENT: Purchaser JOB: 76482

Category : ASSETS GENERALLY (11 items)

Depreciable Item Cost Effective

Life (DV)

Diminishing

Value Opening WDV

Air Conditioning - Mini split systems 3,112$ 10 20% 3,112$

Door closers 274$ <= $300** 100% 274$

Floor coverings - Carpet 4,532$ 10 20% 4,532$

Floor coverings - Carpet (Common) 229$ <= $300** 100% 229$

Floor coverings - Floating timber 1,421$ 15 13.34% 1,421$

Hot water systems (excluding piping) 2,018$ 12 16.66% 2,018$

Lights - Fittings (Common) 364$ <= $300** 100% 364$

Lights - Fittings (excluding hardwired) 2,604$ <= $300** 100% 2,604$

Master antenna television (MATV) assets 291$ <= $300** 100% 291$

Ventilation fans 1,273$ 20 10% 1,273$

Window blinds, internal 1,715$ <= $300** 100% 1,715$

Category : BATHROOM ASSETS (1 item)


Life (DV)

Diminishing

Value Opening WDV

Exhaust fans 548$ <= $300** 100% 548$

SCHEDULE OF DEPRECIABLE ITEMS BASED UPON THE DIMINISHING VALUE METHOD

11


Category : FIRE CONTROL ASSETS (2 items)


Life (DV)

Diminishing

Value Opening WDV

Alarms- Heat & smoke 459$ <= $300** 100% 459$

Extinguishers 114$ <= $300** 100% 114$

Category : KITCHEN ASSETS (3 items)


Life (DV)

Diminishing

Value Opening WDV

Cook top 1,194$ 12 16.67% 1,194$

Dishwasher 1,408$ 10 20% 1,408$

Oven 1,715$ 12 16.67% 1,715$

Category : LAUNDRY ASSETS (1 item)


Life (DV)

Diminishing

Value Opening WDV

Exhaust fans 243$ <= $300** 100% 243$

Category : OUTDOOR ASSETS (2 items)


Life (DV)

Diminishing

Value Opening WDV

Automatic garage doors - Controls 148$ <= $300** 100% 148$

Clothesline 297$ <= $300** 100% 297$

12


Category : SECURITY & MONITORING ASSETS (1 item)


Life (DV)

Diminishing

Value Opening WDV

Access control systems - Code pads & door controllers 1,379$ 5 40% 1,379$

VALUE OF PLANT ITEMS 25,338$ 25,338$

** Indicates items that are less than or equal to $300.00.

Category : LOW VALUE POOL ITEMS (4 items)


Life (DV)

Diminishing

Value Opening WDV

Water pumps 449$ Low Pool* 18.75% 449$

Range hood 857$ Low Pool* 18.75% 857$

Clothes dryer 796$ Low Pool* 18.75% 796$

Automatic garage doors - Motors 836$ Low Pool* 18.75% 836$

VALUE OF LOW POOL ITEMS 2,938$ 2,938$

Category : BUILDING ALLOWANCE (Capital Works)


Life (PC)Prime Cost Opening WDV

Building allowance 275,216$ 40 2.50% 275,216$

VALUE OF BUILDING ALLOWANCE 275,216$ 275,216$

* Indicates items allocated to Low Pool Category. These items must be calculated using Diminishing Value Method. Low Pool items are depreciated at

18.75% in the year of acquisition. In the following year the opening tax value of the pool is written down using the Diminishing Value rate of 37.5% p.a.

13


FINANCIAL YEAR DEPRECIATION LOW VALUE CAPITAL WORKS

END PLANT & EQUIPMENT POOL ITEMS DEDUCTIONS

2016 / 2017 $10,786 $551 $6,880 $18,217

2017 / 2018 $2,742 $895 $6,880 $10,518

2018 / 2019 $2,173 $560 $6,880 $9,613

2019 / 2020 $1,737 $350 $6,880 $8,968

2020 / 2021 $1,399 $219 $6,880 $8,498

2021 / 2022 $1,134 $137 $6,880 $8,151

2022 / 2023 $923 $85 $6,880 $7,889

2023 / 2024 $755 $53 $6,880 $7,689

2024 / 2025 $619 $33 $6,880 $7,533

2025 / 2026 $509 $21 $6,880 $7,411

2026 / 2027 $420 $13 $6,880 $7,313

2027 / 2028 $347 $8 $6,880 $7,236

2028 / 2029 $288 $5 $6,880 $7,173

2029 / 2030 $239 $3 $6,880 $7,122

2030 / 2031 $199 $2 $6,880 $7,081

2031 / 2032 $166 $1 $6,880 $7,047

2032 / 2033 $138 $1 $6,880 $7,019

2033 / 2034 $116 $0 $6,880 $6,997

2034 / 2035 $97 $0 $6,880 $6,978

2035 / 2036 $82 $0 $6,880 $6,962

2036 / 2037 $69 $0 $6,880 $6,949

2037 / 2038 $58 $0 $6,880 $6,938

2038 / 2039 $49 $0 $6,880 $6,929

2039 / 2040 $41 $0 $6,880 $6,922

2040 / 2041 $35 $0 $6,880 $6,916

2041 / 2042 $30 $0 $6,880 $6,910

2042 / 2043 $25 $0 $6,880 $6,906

2043 / 2044 $22 $0 $6,880 $6,902

2044 / 2045 $19 $0 $6,880 $6,899

2045 / 2046 $16 $0 $6,880 $6,896

2046 / 2047 $14 $0 $6,880 $6,894

2047 / 2048 $12 $0 $6,880 $6,892

2048 / 2049 $10 $0 $6,880 $6,891

2049 / 2050 $9 $0 $6,880 $6,889

2050 / 2051 $8 $0 $6,880 $6,888

2051 / 2052 $7 $0 $6,880 $6,887

2052 / 2053 $6 $0 $6,880 $6,886

2053 / 2054 $5 $0 $6,880 $6,885

2054 / 2055 $4 $0 $6,880 $6,885

2055 / 2056 $4 $0 $6,880 $6,884

2056 / 2057 $3 $0 $0 $3

DIMINISHING VALUE - YEAR END SUMMARY


AMOUNT CLAIMABLE

14


DEPRECIATION SCHEDULE

BASED UPON

THE PRIME COST METHOD

This method evenly spreads out the depreciation you can claim on Plant and

Equipment items.

15


DATE: 9-Dec-16

JOB: 76482

DESCRIPTION VALUE CALCULATIONS

PURCHASE PRICE $650,000

BUILDING COST $258,866

ADD

BUILDERS PRELIMINARIES $38,027

ADD

PROFESSIONAL FEES $9,293

TOTAL CONSTRUCTION COSTS $306,187 $306,187

LESS

TOTAL INSTALLED COST OF PLANT & EQUIPMENT $28,276

LESS

ALLOWANCE FOR ITEMS NOT

ELIGIBLE FOR DEPRECIATION: $2,694

SUB TOTAL $30,971 -$30,971

BUILDING ALLOWANCE – SECTION 43 (INITIAL STRUCTURE) $275,216

PROJECT: Sample Unit, NSW 2127

CLIENT: Purchaser

CONSTRUCTION SUMMARY - PRIME COST METHOD

DEPRECIATION & BUILDING ALLOWANCES BASED ON THE PRIME COST METHOD AS OUTLINED IN THE

NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES ) ACT1999.

AMENDMENTS TO INCOME TAX ASSESSMENT ACT 1997 BY

NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES) ACT 1999

(ACT 164 of 1999, ROYAL ASSENT 10 DECEMBER 1999).

16


PROJECT: Sample Unit, NSW 2127 DATE: 9-Dec-16

CLIENT: Purchaser JOB: 76482

Category : ASSETS GENERALLY (12 items)



Air Conditioning - Mini split systems 3,112$ 10 10% 3,112$

Door closers 274$ 10 10% 274$

Floor coverings - Carpet 4,532$ 10 10% 4,532$

Floor coverings - Carpet (Common) 229$ 10 10% 229$

Floor coverings - Floating timber 1,421$ 15 6.67% 1,421$

Hot water systems (excluding piping) 2,018$ 12 8.33% 2,018$

Lights - Fittings (Common) 364$ 5 20% 364$

Lights - Fittings (excluding hardwired) 2,604$ 5 20% 2,604$

Master antenna television (MATV) assets 291$ 10 10% 291$

Ventilation fans 1,273$ 20 5% 1,273$

Water pumps 449$ 20 5% 449$

Window blinds, internal 1,715$ 10 10% 1,715$

SCHEDULE OF DEPRECIABLE ITEMS BASED UPON THE PRIME COST METHOD

17


Category : BATHROOM ASSETS (1 item)



Exhaust fans 548$ 10 10% 548$

Category : FIRE CONTROL ASSETS (2 items)



Alarms- Heat & smoke 459$ 6 16.67% 459$

Extinguishers 114$ 15 6.67% 114$

Category : KITCHEN ASSETS (4 items)



Cook top 1,194$ 12 8.33% 1,194$

Dishwasher 1,408$ 10 10% 1,408$

Oven 1,715$ 12 8.33% 1,715$

Range hood 857$ 12 8.33% 857$

18


Category : LAUNDRY ASSETS (2 items)



Clothes dryer 796$ 10 10% 796$

Exhaust fans 243$ 10 10% 243$

Category : OUTDOOR ASSETS (3 items)



Automatic garage doors - Controls 148$ 5 20% 148$

Automatic garage doors - Motors 836$ 10 10% 836$

Clothesline 297$ 5 20% 297$

Category : SECURITY & MONITORING ASSETS (1 item)



Access control systems - Code pads & door controllers 1,379$ 5 20% 1,379$

VALUE OF PLANT ITEMS 28,276$ 28,276$

Category : BUILDING ALLOWANCE (Capital Works)



Building allowance 275,216$ 40 2.50% 275,216$

VALUE OF BUILDING ALLOWANCE 275,216$ 275,216$

19


FINANCIAL YEAR DEPRECIATION CAPITAL WORKS

END PLANT & EQUIPMENT DEDUCTIONS

2016 / 2017 $3,104 $6,880 $9,984

2017 / 2018 $3,104 $6,880 $9,984

2018 / 2019 $3,104 $6,880 $9,984

2019 / 2020 $3,104 $6,880 $9,984

2020 / 2021 $3,104 $6,880 $9,984

2021 / 2022 $2,145 $6,880 $9,026

2022 / 2023 $2,069 $6,880 $8,949

2023 / 2024 $2,069 $6,880 $8,949

2024 / 2025 $2,069 $6,880 $8,949

2025 / 2026 $2,069 $6,880 $8,949

2026 / 2027 $670 $6,880 $7,551

2027 / 2028 $670 $6,880 $7,551

2028 / 2029 $188 $6,880 $7,069

2029 / 2030 $188 $6,880 $7,069

2030 / 2031 $188 $6,880 $7,069

2031 / 2032 $86 $6,880 $6,967

2032 / 2033 $86 $6,880 $6,967

2033 / 2034 $86 $6,880 $6,967

2034 / 2035 $86 $6,880 $6,967

2035 / 2036 $86 $6,880 $6,967

2036 / 2037 $0 $6,880 $6,880

2037 / 2038 $0 $6,880 $6,880

2038 / 2039 $0 $6,880 $6,880

2039 / 2040 $0 $6,880 $6,880

2040 / 2041 $0 $6,880 $6,880

2041 / 2042 $0 $6,880 $6,880

2042 / 2043 $0 $6,880 $6,880

2043 / 2044 $0 $6,880 $6,880

2044 / 2045 $0 $6,880 $6,880

2045 / 2046 $0 $6,880 $6,880

2046 / 2047 $0 $6,880 $6,880

2047 / 2048 $0 $6,880 $6,880

2048 / 2049 $0 $6,880 $6,880

2049 / 2050 $0 $6,880 $6,880

2050 / 2051 $0 $6,880 $6,880

2051 / 2052 $0 $6,880 $6,880

2052 / 2053 $0 $6,880 $6,880

2053 / 2054 $0 $6,880 $6,880

2054 / 2055 $0 $6,880 $6,880

2055 / 2056 $0 $6,880 $6,880

2056 / 2057 $0 $0 $0

PRIME COST - YEAR END SUMMARY


AMOUNT CLAIMABLE

20


$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

2016 / 2

017

2018 / 2

019

2020 / 2

021

2022 / 2

023

2024 / 2

025

2026 / 2

027

2028 / 2

029

2030 / 2

031

2032 / 2

033

2034 / 2

035

2036 / 2

037

Diminishing Value Method Vs. Prime Cost Method

Diminishing Value Method Prime Cost Method

21

Documents

The Property Depreciation Experts - Washington Brown · This depreciation schedule has been prepared for the sole purpose of depreciation claims to reduce investment owner's taxable