Five questions you should ask your Quantity Surveyor

Are you an investor who’s heard about the benefits of depreciation and have decided to start claiming?

That’s great news for your investment.

Claiming depreciation will help you maximise the cash return from your investment property. As a non-cash deduction, depreciation is a quick win for investors and requires minimal effort on the owner’s end.

But before organising a Quantity Surveyor to prepare your tax depreciation schedule, it’s important to note that not all Quantity Surveyors are created equal, and some due diligence is usually required before forging ahead.

Just like you would seek the best Property Manager to manage your investment property, you should do the same when choosing to work with a Quantity Surveyor.

To help ensure you get maximum deductions, here are five questions you should be asking your potential Quantity Surveyor.

What industry qualifications do you have? And are you a registered Quantity Surveyor?

When choosing a Quantity Surveyor, it is important to check that they are members of the Australian Institute of Quantity Surveyors (AIQS). The AIQS is an industry body that assists its members to maintain compliance with industry regulations and Australian Standards ensuring a high quality of service.

In addition to being accredited by the AIQS, it is also important to check that the firm are registered tax agents with the Tax Practitioners Board (TPB). The TPB is the national body responsible for the registration and regulation of tax agents ensuring compliance with the Tax Agents Services Act 2009 (TASA). Quantity Surveyors need to be registered tax agents to complete tax depreciation schedules for investment properties.

Do you specialise in tax depreciation?

Not all Quantity Surveyors specialise in tax depreciation. Only a tax depreciation specialist can be relied on to maintain detailed knowledge of all current Australian Taxation Office (ATO) Tax Rulings relating to depreciation.

This difference is reflected in a property investors’ bottom line. Because of their in-depth industry knowledge, a specialist Quantity Surveyor can help their clients claim more deductions, pay less tax and see a greater return on their investment.

Is my property too old?

Since changes to claiming depreciation on second-hand residential properties were introduced following the 2017 federal budget*, many investors now wonder if they’re still able to claim depreciation for their investment properties.

The bottom line is that it is always worth enquiring about what depreciation deductions are available.

Even if your property was purchased second- hand after this date, it is likely there will still be some deductions available, whether it’s in the form of capital works deductions, previous renovations or newly installed plant and equipment assets.

Now more than ever it’s important to maximise the deductions you are legally entitled to.

What’s included in your tax depreciation schedules?

Your tax depreciation schedule needs to be comprehensive and ATO compliant. This helps you claim maximum deductions and also covers you in the event of an audit from the ATO.

As an example of what should be included in a schedule, a BMT Tax Depreciation Schedule contains a one page overview of total deductions, the prime cost and diminishing value methods for plant and equipment assets, a forty year projection of all available deductions, and a glossary of terms for easy understanding.

The Quantity Surveyor should also be able to provide Excel and CSV schedule files for Accountants and owners for easy importing into compatible accounting software.

Furthermore, if your property is owned by more than one party, your Quantity Surveyor should be able to provide you with a split report, as this often results in higher deductions earlier.

Do you outsource any of your work?

Some tax depreciation companies will outsource parts of the process of preparing a schedule to contractors or external Quantity Surveyors and Site Inspectors. While not technically incorrect or bad practice, this can be an inconvenience service wise and may lead to a greater chance of errors occurring, if several parties are working on the one schedule.

Please note that BMT do not outsource any of their operations.

Under new legislation outlined in the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 passed by Parliament on 15th November 2017, investors who exchange contracts on a second-hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on previously used plant and equipment assets. Investors can claim deductions on plant and equipment assets they purchase and directly incur the expense for. Investors who purchased prior to this date and those who purchase a brand-new property will still be able to claim depreciation as they were previously. To learn more visit www.bmtqs.com.au/budget-2017 or read BMT’s comprehensive White Paper document at www.bmtqs.com.au/2017-budget-whitepaper.

ARTICLE FIRST PUBLISHED BY BMT INSIDER. ARTICLE PROVIDED BY BMT TAX DEPRECIATION.
BRADLEY BEER (B. CON. MGT, AAIQS, MRICS, AVAA) IS THE CHIEF EXECUTIVE OFFICER OF BMT TAX DEPRECIATION.
PLEASE CONTACT 1300 728 726 OR VISIT 
WWW.BMTQS.COM.AU FOR AN AUSTRALIA-WIDE SERVICE.

Investing in Sunshine Coast property – why the time is right

The Sunshine Coast has been receiving a lot of attention lately and it’s not only because we have outstanding weather and great beaches.  While Tourism is an incredibly important sector of our economy, we are forging ahead with a number of major infrastructure changes that are firming up our place as one of the fastest growing regions in Australia.

Currently on our horizon, and under construction are:

  • The creation of our new city centre, SunCentral in Maroochydore, which is Australia’s only green field CBD.
  • Australia’s next international airport which is set to contribute $4.1 billion to the Sunshine Coast economy and generate 2230 jobs by 2040.
  • Australia’s largest residential development at Caloundra South which will be the home to 50,000 people.

In addition, our new $1.8bn public University Hospital opened its doors just on 12 months ago and the Health & Wellbeing sector continues to grow from strength to strength. Our Agribusiness sector is also enjoying solid growth and is now worth $670 million to our economy.

And if that isn’t enough to entice you to look a little closer into the future prospects of the Sunshine Coast consider these facts:

  • The expansion of Sunshine Plaza will create a further 5,200 construction and retail jobs
  • The University of the Sunshine Coast is expected to reach 20,000 students by 2020
  • Palmview will cater for 17,000 new residents
  • The Light Rail Project will contribute $3.6 billion to the economy
  • Beerwah East has been earmarked as a major development area and is expected to be ready for development by 2027
  • The International Broadband Submarine Cable is not yet confirmed as going ahead but if it does, it is expected to deliver $700m per annum to the Sunshine Coast economy.

All these projects have or are creating a myriad of positions requiring varying skills and because of that we are attracting talent from interstate like never before.

In the 2015-2016, Australian Bureau of Statistics data shows that 23,113 people moved to the Sunshine Coast from other areas of Australia while 16,913 people moved away.  The net increase of 6,200 people is the third most in Queensland (after Moreton Bay and the Gold Coast).

Rental properties are in demand and often have a number of applicants all vying for the same property.  The pressure on the rental market also comes from the year round national sporting events that are held here.

The Sunshine Coast is now becoming an event and sporting destination and we will continue to attract larger events to the region, which means the demand for housing and accommodation is set to continue for some time into the future.

If you have been thinking about entering the property marketing or starting your own property portfolio there has never been a better time to act.  We can help you put strategies in place that will help you attain your goals in an easy to understand, affordable way. Call us today for a no obligation chat about how we can work with you to reach your goals.