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What is a Quantity Surveyor?

Investors Need a Tax Depreciation Report

Investors Need a Tax Depreciation Report

It’s tax time and for property investors it means getting everything in order for the previous year. A big part of this documentation process is the collation of expenses related to your investment property.

While it might be relatively easy to keep a record of the bills and receipts you have been given during the year, an often overlooked aspect of tax is depreciation on your property.

Depreciation is the process of ‘writing down’ the value of your building and fixtures and fittings. It’s worked out as an annual dollar amount and able to be placed in the expenses column of your property balance sheet.

In short, depreciation is on-paper losses (written down values) that you can use in your profit and loss for your property/ies.

To do this you need a Tax Deprecation report and the person who can deliver that is a Quantity Surveyor. Yes I know, it is a weird name but they do some magic stuff for your property expenses.

To find out more about what they do and how they work, Real Property Advice chatted with long time Quantity Surveyor, Graham King to find out more:

RPA – Good morning Graham, can you tell me, what is a Quantity Surveyor?
GKHi Scott, a Quantity Surveyor is a professional associated with the cost of building and civil engineering. Also known as construction economist or cost manager. The Quantity Surveyors role is to estimate and monitor costs from feasibility stage through to completion. After construction the Quantity Surveyor may be involved with tax depreciation schedules and replacement cost assessment for insurance and mediation and/or arbitration.

RPA – How long have you been a Quantity Surveyor?
GKWell a very long time. I started out in England in 1966, then continued when I moved over to Australia and have done so ever since.

RPA – What qualifications do Quantity Surveyors have or need?
GKA Quantity Surveyor needs to be a member of the Australian Institute of Quantity Surveyors (AIQS). If the Quantity Surveyor prepares depreciation schedules then they also need to be registered as a tax agent as required by the ATO. The AIQS and the ATO both require continued professional development.

RPA – Why would I need one?
GKFor the purposes of tax depreciation on buildings you need a quantity surveyor to value the building and the plant and equipment. They then use the values to prepare schedules which outline depreciable values on a yearly basis using the relevant depreciation percentages provided by the ATO.

RPA – Cant my accountant do this for me?
GKNo, the ATO only allows depreciation schedules to be prepared by Quantity Surveyors.

RPA – How often do I need to get a report done?
GKOnce a report is prepared it only needs to be updated for alterations / renovations / extensions when these are carried out.

RPA – If I have never done a report, can I get one now?
GKA report can be done at any time. If previous years need to be claimed your accountant should be consulted as to how far back you can go.

RPA – How much can I expect to get back on my tax?
GKHow much your tax is impacted will depend on the value of the building / plant and equipment and your marginal tax rate. The newer and better equipped the building and the higher your tax rate, the more impact on your tax. I provide three alternative 10 year schedules with different methods of depreciation to suit individual needs.

RPA – Now what everyone always wants to know, how much does a deprecation report from a Quantity Surveyor cost?
GKThe cost of a depreciation schedule varies depending on the type of building. As an indication the current cost of a schedule for a standard house in my serviced area is $400 – $450 plus GST.   High rise units and holiday lets with furniture cost more and where more travel is involved a travel loading might apply.

RPA – Thanks Graham, seems like a cheap way to reduce an investors tax bill! Thanks for your time today.
GKYes a report is something all investors should consider. Happy to help anytime.

If you are a property investor and do not have a Quantity Surveyors report, or have performed renovations or alterations since your last report, you need to get one now.

Investment properties need to work for you and this is one way to make sure that happens more efficiently.

If you need a recommendation for a Quantity Surveyor in your area, or would like to contact Graham King, please email us here or call our office on 1300 66 77 89.Scott Northcott Australian Property Advisor

Since 2004 Scott Northcott has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scott has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model. By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scott designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.

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