Hi all
We purchased a 10 y.o. house as a resi IP a little over a year ago. Earlier this year we engaged a Quantity Surveyor (QS) to do a depreciation schedule as we were between tenants. When we met with our accountant this week he pointed out o I know, I really should have looked more closely) that the fixtures and fittings hadn't been valued sensibly (in our opinion).
The QS had estimated the original cost of the fixtures and fittings as at (the year) 2000 and then depreciated them to our settlement date, leaving the residual balance as the current value we could start depreciating. As an example, curtains valued at say $1000 in 2000 have had $990 'depreciated' over the past 10 years and are now valued at $10 . An alarm system valued at $1200 in 2000 has had $1195 'depreciated' and is now valued at $5 (which we can claim over the next 6 years )
Surely a working alarm system (even if 10 y.o.) is worth more than $5 today! Speaking to two other QS firms today, they advise that they value the items at settlement date and factor in the property purchase price.
1. Is our QS valuation of our fixtures and fittings correct?
2. If not, any suggestions on getting them to revise their valuations?
(FWIW, the QS is recommended by some on this forum, is a member of the Australian Institute of QS, and isn't Depreciator (though probably should have been!)
Thanks in advance,
Green Goblin
We purchased a 10 y.o. house as a resi IP a little over a year ago. Earlier this year we engaged a Quantity Surveyor (QS) to do a depreciation schedule as we were between tenants. When we met with our accountant this week he pointed out o I know, I really should have looked more closely) that the fixtures and fittings hadn't been valued sensibly (in our opinion).
The QS had estimated the original cost of the fixtures and fittings as at (the year) 2000 and then depreciated them to our settlement date, leaving the residual balance as the current value we could start depreciating. As an example, curtains valued at say $1000 in 2000 have had $990 'depreciated' over the past 10 years and are now valued at $10 . An alarm system valued at $1200 in 2000 has had $1195 'depreciated' and is now valued at $5 (which we can claim over the next 6 years )
Surely a working alarm system (even if 10 y.o.) is worth more than $5 today! Speaking to two other QS firms today, they advise that they value the items at settlement date and factor in the property purchase price.
1. Is our QS valuation of our fixtures and fittings correct?
2. If not, any suggestions on getting them to revise their valuations?
(FWIW, the QS is recommended by some on this forum, is a member of the Australian Institute of QS, and isn't Depreciator (though probably should have been!)
Thanks in advance,
Green Goblin