It’s a question we’re asked from time to time, and the answer isn’t just about preparing Depreciation Schedules. Plenty of providers can do that.

It’s about what happens before, during and after we prepare one.

We have nearly 25 years of experience, and over that time we’ve developed a very different approach to helping accountants and their clients. From complex commercial properties and new builds, to helping with CGT calculations and having sensible conversations with your clients, there’s more to what we do than simply producing a Depreciation Schedule.

So, what makes us different? Here are a few things you might not know about Depreciator.

Key takeaways

1. 1. We prepare Depreciation Schedules for commercial properties – shops, offices, warehouses, even farms and child care centres – we do them all.
2. 2. Newly built properties may be a more attractive option for clients after the recent budget changes. We can prepare these with your clients actual costs often without an inspection with the same depreciation outcome. And it means we’ll get them done even quicker – within just a matter of days.
3. 3. If you have a client that needs help with CGT calculations, get in touch. We can help estimate the original build cost and any improvements done since.
4. 4. We’re here to have sensible conversations about your clients’ investment properties and depreciation so that you don’t have to.

   Other providers won’t have the same level of expertise or service that Depreciator does.

5. 5. We’ve updated our digital brochures, designed for your clients who may have questions about depreciation and how it can help. Click on the digital brochures link above to download these.

Commercial properties are finding favour with investors

And Depreciator is finding favour with accountants who need Depreciation Schedules on commercial properties – they are not as straightforward as residential jobs.

You name it, we’ve done a Depreciation Schedule on it.

Shops and offices? Of course.

Warehouses and factories? Every week.

Farms? Yep, and that includes fish farms and chicken farms (oh, the smell of those places).

Hotels and motels? Restaurants and cafes? Childcare centres? Medical centres?

We do them all. And we expect to do more as investors gravitate to them. But why?

Commercial properties already found increasing favour after the changes to the treatment of used Assets left them unscathed.

And they dodged a bullet given they were excluded from the recent rule changes around Negative Gearing and CGT.

It takes considerable experience to do commercial properties properly. We understand which properties qualify for the 4% (vs 2.5% building write-off). You can read more on that here. 

We were contacted recently by an accountant whose client had a Depreciation Schedule for a recently purchased commercial property. They thought that instead of 2.5% being used for the Capital Works deduction, 4% was possible. 

We agreed. The building was used for the processing of reclaimed timber (ex demolition). The timber was milled and dressed and then made into furniture. That building had a hard life with that manufacturing operation: 

• – It was built in 2012 at an estimated cost of $658K.
• – At 2.5%, the Capital Works were being claimed at $16,450.
• – At 4%, that figure would be $26,320 – an extra $10,000 in Capital Works every year. 

We also understand that commercial properties often involve two related entities – one will own the building, and the other will own the fit out.

Sometimes there is just a tenant and a third party landlord who has provided a fit out incentive – and who wants their own Depreciation Schedule that accounts for the incentive payment.

You can read more about Commercial Properties on our website here. 

In short, they are more complicated than residential jobs, which is why some providers avoid them – or do them badly.

New build properties don’t always need inspecting

Builders are already reporting an uptick in enquiries from investors wanting new houses after the recent Budget changes – now they just have to build them. You can read more on the recent Budget changes here.

We are also getting more and more clients coming to us for Depreciation Schedules on new builds. There would be a few  reasons for this.

The first is that the need for inspection is not our default position as it is with some providers. We even have accountants referring clients with newly built properties who suggest we can probably do a Depreciation Schedule without an inspection. If there is a build contract with a total price and very clear information on the Assets along with a floor plan, an inspection is really not needed. To be honest, they can just slow things down.

We can also do them quickly if we are not inspecting – the next day in some cases if it will help you.

Every day of the week, we do Depreciation Schedules on new houses where there is a very prescriptive build contract. That very clear contract will have a total build cost of the house including driveways and fencing. Let’s say it is $335,000 (excluding land). Depreciation in the first full year on that $335,000 house will be around $13,000.  Here’s how:

• – That contract will also list all the Depreciating Assets in the house. We then ascribe an OWDV to those items. Typically they will cumulatively equate to 8-9% of the total build cost – perhaps $30,000.
• – The net build cost might end up around $305,000, which gets claimed at 2.5% per year – $7,625. And that $30K of Assets is mostly claimed in the first 6-8 years.
• – Depreciation in the first full year on that $335,000 house will be around $13,000.

Of course, if a client wants us to do an inspection, that’s fine. We’re always happy to do that. And sometimes we have no choice – there may be no build contract, for instance.

Whether we inspect or not, we guarantee the outcome of our Depreciation Schedules for new builds. Yep! Our unique New Build Guarantee means we’ll find at least 10 times our fee in depreciation in just the first full year, or your client’s Depreciation Schedule will be free. You can read more on this here. 

How we help with CGT Calculations for existing properties

We have always done these and we know for sure we’ll be asked for more assistance with CGT calcs down the track.

Typically, the scenario is the client of an accountant built a house a long time ago and it was never intended to be a rental. Perhaps it was a holiday house used by the family till the kids no longer wanted to holiday with mum and dad.

Then mum and dad stopped using it and the family thought they might as well get some income from it. And now the property has been sold and there is a CGT issue.

The initial land purchase is often the only known cost the accountant has for CGT calcs.

So we get a call.

With enough information (and there is always enough) our Quantity Surveyors are able to estimate the original build cost and cost the improvements. 

There was no record of the original build cost of the home dad had built – we can estimate that.  Let’s say it was $120,000.

Then over the  years, there were improvements made over a 25 year period and no records kept: a deck, bigger kitchen, a big shed for toys. The cost of them? In the most recent job we did, $137,500. 

So in this case, we were able to help boost the cost base for CGT calcs by $257,500.

We could be the only provider that can help accountants out in these scenarios – and our help will be needed more next year when the changes to CGT take hold and it is important that all property improvements are noted. You can read more on this here. 

We’ll have sensible conversations with your clients

When you refer a client to Depreciator, we will call them within an hour and ask them some questions about the property. We do that mainly to make sure there is enough depreciation to be claimed to proceed.

In many cases, we can even give them an estimate of expected depreciation.

Then we will work out the most sensible way to do the job.

So you can refer a client to us with confidence.  

When they get their Depreciation Schedule, they might have questions and often call us.

We can talk them through their Depreciation Schedule so you don’t have to. Other providers don’t have the same level of expertise or service that Depreciator does. 

And every conversation we have with your client is one you don’t need to have.

Enquire now for a property-specific assessment

Has this article reminded you about a client’s investment property? Residential properties, commercial properties, even farms, we do them all.

If you want us to talk to a client about a Depreciation Schedule, make a no-obligation enquiry and rely on our 20-plus years of experience in estimating depreciation returns.