Depreciation

1. Master Class:
Crucial Depreciation tips to
help boost your cash flow
With: Tyron Hyde
From: Washington Brown

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3. We help investors
build and manage
their property portfolios

4. In partnership with…

5. Real Estate Investar’s tools
Visit www.realestateinvestar.com.au for a free 21 day trial

6. Portfolio Solutions Master Class
• Designed to share knowledge.
• Desire to provide extra value to our
clients.
• Great for both new and experienced
investors.
• Plenty of opportunity for Q&A.
• We will run these regularly throughout
the year, and sometimes involve our
partners to provide additional insight.

7. Tonight’s topics
1. How to use your depreciation within your
portfolio to maximise your rental returns.
2. Renovation & Scrapping
3. Commercial Property & Superfunds
4. Older properties depreciate too – what to
do if you own older properties & how to
maximise your claim.
5. Capital Gains Tax (CGT) & The Building
Allowance
Plus a LIVE Q & A session following the
webinar

8. General advice disclaimer
Material contained in this presentation is an overview only and it should not
be considered as a comprehensive statement on any matter nor relied upon
as such.
This presentation contains general information only and does not take into
account your personal objectives, financial situation or needs and you should
consider whether the information is appropriate to you before acting on it.
Both superannuation and tax laws are complex and subject to change. Before
acting on any information you should consider seeking advice from a financial
adviser and your accountant before making any financial decision in relation
to any matters discussed in this presentation.

9. Audience poll:
Which type of property
investor are you?

10. Audience poll:
Do you own any investment
properties without a
depreciation schedule?

11. Washington Brown – QUANTITY SURVEYORS
Tyron Hyde CEO AAIQS
Quantity Surveyor for 20+ Years
Registered Tax Agent
Author of CLAIM IT! – Only Author on the topic
Regular commentator for many publications
The least boring Quantity Surveyor

12. MASTERCLASS

14. Washington Brown – QUANTITY SURVEYORS
Tyron Hyde CEO AAIQS
Quantity Surveyors
Established for 30 years
Property Depreciation
division established for 22
years
Offices Nationwide
Cost Planning
Sinking Fund Analysis
Building Insurance
Valuations
Due Diligence Reports
Tax Depreciation
We work out what things cost to build (or try at least!!)

15. What’s the REAL story?

16. Meet the Brown in Washington Brown

17. But Why?

18. What is Property Depreciation?
Claim Wear & Tear
Property Must Be Income Producing
Property depreciation varies from Country to
country
Many property investors still don’t claim
depreciation
– Do you?
SUMMARY – You can reduce your taxable income by the
amount of depreciation you can claim

19. Capital works allowance - DIVISON 43
This is commonly referred to as
the “Building Allowance”
The amount of the deduction is determined
by the actual
construction cost.
Must Be Post 1985 Residential

20. Plant & Equipment – Division 40
This is commonly referred to as “Plant and Equipment”
This includes items such as Ovens, Dishwashers,
carpets blinds
COMMON PROPERTY
You can claim your portion of common property
Items; lifts, some fire services, ventilation
More Plant = Great $saving

21. Master Class - Renovations

22. Master Class-Renovations
Renovation Questions
Do we need a receipt for the renovations we just did?
Can I claim the renovations by the previous owner?

23. Master Class-Renovations
Renovation Questions
I renovated the property when it was my PPOR – can I still CLAIM IT?
If the previous owner was claiming the renovations how does that work?

24. Master Class-Renovations
Renovation Questions
I lived in the home during renovations – should I get a QS out now?
#Scrapping
What’s the best type of renovations to maximum yield? And should
I buy a house that needs renovating?

25. Master Class
Commercial Property

26. Master Class - Commercial Depreciation
COMMERCIAL QUESTIONS
What’s the difference between commercial property depreciation
and residential property depreciation?
I’ve owned my commercial property for 6 years is it worthwhile?
My shop is part of a shopping mall – can I still CLAIM IT!?

27. Master Class - Commercial Depreciation
COMMERCIAL QUESTIONS
Can I claim the fit-out?
I bought the property in my super fund and then lease the property to
my business. How does that work?
I bought a motel – can I depreciate it? And at what rate?

28. Santa Claus…$20k – Thanks Joe!

29. Master class - Technical Stuff!

30. Master Class - Technical
Stuff! Can I CLAIM IT retrospectively?
Can you depreciate granny flats?
How do find the actual cost of construction?
How long does a depreciation schedule last for?

31. Master Class - Technical Stuff!
If an oven is worth $600 and 3 owners buy the property…
….how does that work?
Is a swimming pool & landscaping depreciable?
If I buy a property and the owners gives me a schedule
– is that good? Do I have to use it?
How do you work out the construction costs?
Sqm etc?

32. Master Class - Technical Stuff!
What info do you need to do the report?
Are Plant & Equipment items depreciated at the same rate?
How does land work in the equation?
Is it worth getting a dep report for a 30 year old property?

33. Master Class - Technical Stuff!
How do you find out how old the property is?
Is it worth getting a report if I bought the property in my SMSF?
Do we need to provide receipts?

34. Master Class - Technical Stuff!
Shouldn’t my accountant do this?
Is it better to CLAIM IT! – through a tax variation?
Are there different ways to claim the depreciation?

36. The BIG
Question

38. PROPERTY INVESTMENT AND CAPITAL GAINS TAX
Purchase Price $200,000
Sale price $300,000
Capital gain $100,000
Claims $10,000 in building allowance and $20,000 in plant and equipment
Building allowance claimed $10,000
New capital gain $110,000
So CGT Payable on building allowance
$10,000 / 2 = $5000 * 45% = $2,250
So CGT Payable on plant and equipment
$20,000 * $0 = $0
Total value of Depreciation claimed =$30,000 *.45 = $13,500
Total value of CGT payable =$2,250 + $0 - $2,250
Net Savings by claiming Depreciation $11,250

43. Testimonials
Finally! A book on depreciation that truly explains the nitty gritty
of this often misunderstood concept. Every investor NEEDS
to read this book! - Nila Sweeney, Editor, Your Investment Property
If there is some detail about property depreciation Tyron Hyde does
not know I have yet to find it... his deep knowledge of how to take a
full advantage of the depreciation rules helps investors make the
highest possible returns from their real estate investments
- Pam Walkley, Editor in Chief, Money Magazine

46. Once upon a time….

47. Put that down sir…..

49. Commercial Properties Depreciate
CGT & The Building Allowance
Renovation and Scrapping
Old properties depreciate
Super funds & Commercial property
We guarantee our results
6 Take-aways from tonight

50. Audience poll:
Would you like a free
depreciation estimate?

51. ANY QUESTIONS?
THANKS FOR
YOUR TIME