{"id":3811,"date":"2015-03-17T01:00:43","date_gmt":"2015-03-16T14:00:43","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=3811"},"modified":"2015-03-17T01:00:43","modified_gmt":"2015-03-16T14:00:43","slug":"tell-me-about-scrapping","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/tell-me-about-scrapping\/","title":{"rendered":"Tell me about scrapping"},"content":{"rendered":"<p>&nbsp;<br \/>\n<strong>Brad Beer<\/strong> from BMT Tax Depreciation Quantity Surveyors explains how, when you are renovating, you may be able to get tax benefit from what you throw away.<br \/>\n&nbsp;<\/p>\n<h4>Transcript:<\/h4>\n<p><b>Kevin<\/b>:\u00a0 Brad Beer from BMT Tax Depreciation joins me once again. Brad, thanks again for your time.<br \/>\n<b>Brad<\/b>:\u00a0 Thanks, Kevin.<br \/>\n<b>Kevin<\/b>:\u00a0 I\u2019m enjoying these conversations about tax depreciation schedules. It\u2019s an area that certainly I needed a lot of education on, and I guess a lot of investors do, as well.<br \/>\nCan I ask you the question about older properties? Can I claim depreciation on older properties?<br \/>\n<b>Brad<\/b>:\u00a0 Most definitely, Kevin. Older properties still get depreciation. It\u2019s a common question. People think it\u2019s too old. Always ring; ask the question.<br \/>\nOlder properties don\u2019t get as much depreciation as newer ones. That\u2019s definitely the case. The age will impact on how much you can claim, but it doesn\u2019t mean you can\u2019t claim anything. If it\u2019s not as much, but it\u2019s still deductions, we\u2019ll tell you how much we think it will be before you go ahead. That starter part to find out an estimate is free.<br \/>\n<b>Kevin<\/b>:\u00a0 When I was talking to my accountant last time, he mentioned a building write off and depreciation of plant and equipment. What are the differences there?<br \/>\n<b>Brad:<\/b>\u00a0 Depreciation \u2013 we blanket call it that, but it\u2019s split up into two areas.<br \/>\nThe building write off is a deduction that relates to the structure of a building. It\u2019s normally 2.5% of the construction cost each year. This is where the age does matter. It needs to be built after a certain date in order to claim this.<br \/>\nThe other part is the plant and equipment. This is the soft stuff: carpets, hot water service, blinds, stoves, curtains, things that don\u2019t last as long. The ATO allows us to claim these things quicker based on an effective life, and there are no age restrictions on these things. There\u2019s no special date that says you can or can\u2019t claim them.<br \/>\n<b>Kevin<\/b>:\u00a0 Now, as a renovator, someone who\u2019s going to renovate a property, how does depreciation change during that process?<br \/>\n<b>Brad<\/b>:\u00a0 Depreciation is something that gets claimed on the things that are there. If you renovate and change what\u2019s there, then you\u2019re adding some new stuff, so there are more things to depreciate.<br \/>\nBut in addition to that, the things that were there that you did throw away often have some value, as well, so you want to call the quantity surveyor first and make sure that you\u2019ve assessed what\u2019s there, because sometimes you\u2019re able to scrap or write off the residual value of the existing stuff, as well. Sometimes that can mean quite a few dollars. Do it before the renovation and a little update after for the new things that you\u2019ve put in.<br \/>\n<b>Kevin<\/b>:\u00a0 Tell me about scrapping. Does the Tax Office recognize scrapping reports?<br \/>\n<b>Brad<\/b>:\u00a0 We don\u2019t actually call them a scrapping report. The fact is that \u201cscrapping\u201d is a word that makes it easy to understand what you\u2019re doing. What it really is is writing off the residual value of items. It\u2019s really just a depreciation schedule with a value on items.<br \/>\nYou rent the property out for a period of time, and then you decide to throw some of these things away; they still had some value left, and you get to claim it in that year that you throw them away as opposed to continuing to depreciate them.<br \/>\n<b>Kevin<\/b>:\u00a0 What things can\u2019t be depreciated, Brad?<br \/>\n<b>Brad<\/b>:\u00a0 Anything that\u2019s not directly related to construction and part of the construction of the property. Things like soft landscaping and demolition are nondeductible items. Pretty much most other things that relate to construction, to you creating an income from this property have some sort of depreciation in value. Also, the land is something you don\u2019t depreciate as well.<br \/>\n<b>Kevin<\/b>:\u00a0 What about repairs? How do they differ from improvements?<br \/>\n<b>Brad<\/b>:\u00a0 Repairs and also maintenance are things that you get to claim straight away at 100% in the year that you actually do them. Improvements are things that improve the property. When you replace things in the property with something better, you\u2019re improving the property, so those things need to be depreciated.<br \/>\nWe\u2019ll talk to the accountant on those things \u2013 which ones they want to claim as repairs and maintenance, and which ones are capital improvements that we need to depreciate and prepare the reports appropriately.<br \/>\n<b>Kevin<\/b>:\u00a0 Yes. You mentioned the accountant there. It\u2019s quite normal to work in conjunction with my accountant in these cases?<br \/>\n<b>Brad<\/b>:\u00a0 Most definitely. We only provide the accountant with really one number for the whole tax return. The accountant still does the tax return; we\u2019re just the specialists in this area, in maximizing a depreciation.<br \/>\nIt also takes the risk away from the accountant because the ATO will accept the estimates done by a quantity surveyor for the purpose of these depreciation claims.<br \/>\n<b>Kevin<\/b>:\u00a0 A few more questions I want to ask you, Brad, so we\u2019ll get you to come back. I want to find out about how you claim removal of hazardous items like asbestos, which we\u2019re seeing a lot of now, and also about my own labor, whether I can claim that.<br \/>\nBrad Beer from BMT Tax Depreciation Quantity Surveyors is our guest, and they are the people we recommend you talk to. The website to contact them is bmtqs.com.au.<br \/>\nBrad, thanks again for your time.<br \/>\n<b>Brad<\/b>:\u00a0 Thank you very much, Kevin.<br \/>\n&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Brad Beer from BMT Tax Depreciation Quantity Surveyors explains how, when you are renovating, you may be able to get tax benefit from what you throw away. &nbsp; Transcript: Kevin:\u00a0 Brad Beer from BMT Tax Depreciation joins me once again. Brad, thanks again for&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":3814,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[64,101],"class_list":["post-3811","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-depreciation","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Tell me about scrapping - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/tell-me-about-scrapping\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tell me about scrapping - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Brad Beer from BMT Tax Depreciation Quantity Surveyors explains how, when you are renovating, you may be able to get tax benefit from what you throw away. &nbsp; Transcript: Kevin:\u00a0 Brad Beer from BMT Tax Depreciation joins me once again. 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