The ATO have recognised that Quantity Surveyors are one of the few professionals to have the appropriate skills to calculate the cost of items for the purposes of depreciation in accordance with TR 97/25. We prepare depreciation schedules for all property types, estimating the historical construction costs using our extensive cost databases and in house resources.

A depreciation report shows the yearly tax depreciation of your investment property for a series of years, which can be used at your tax return to help reduce your taxable income and thus reducing your tax payable. The depreciation calculation is based on the construction cost with a fair allowance for the purchase price.

A valuation report shows the value of your property at a specific time point that you can use to calculate your capital gain or loss when you sell the property. The valuation of a property is based on the market condition as well as many other property attributes.

This will be a case by case scenario and will also need to take account of when you made the purchase (referring to the next question). Technically speaking, the depreciation of capital structures will be 40 years, which include both the originally constructed structures and any other additions in the years after, starting from the time when that structure was established. However, the value of the depreciation varies due to the condition of the property as well.

We show 40-year schedules for both diminishing value method and prime cost method. The effective life of capital allowances and capital works are set by ATO. Therefore, the amounts of depreciation each year will not be increased by showing less years in the schedule.