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Redline Quantity Surveyors
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edline Quantity Surveyors are pleased to announce the introduction of split Tax Depreciation Schedules as a standard inclusion where there is more than one owner.

The introduction makes Redline Quantity Surveyors the market leader in Tax Depreciation Schedules! Nowhere else can you have your Tax Depreciation Schedule prepared by a Certified Quantity Surveyor (CQS), as recognised by the Australian Institute of Quantity Surveyors (AIQS), AND have that Schedule split according to each property owner’s percentage share.

By splitting Tax Depreciation Schedules based on each owner’s individual share we are able to take MAXIMUM advantage of the immediate write-off and low-value pooling of Division 40 assets. As a result, our clients benefit from getting their Division 40 depreciation deductions FASTER!

For example, we recently prepared a Tax Depreciation Schedule for a couple who purchased a new townhouse with a 90%/10% ownership split. Without splitting the couple would have claimed a combined total of $3,628 in Division 40 depreciation deductions in the first year, however, after splitting the couple were able to claim an EXTRA $1,359 in combined Division 40 depreciation deductions.

”A Certified Quantity Surveyor (CQS) represents the highest level of expertise within the (Quantity Surveying) profession, providing exemplary service and advice to clients” (source: www.aiqs.com.au).
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On 14 July 2017, the Australian Government released an Exposure Draft Legislation formalising the proposed changes introduced in the 2017 Budget.
For a full transcript, please follow the link:
http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2017/Disallowing-travel-deductions
At first glance, there appears no real surprises and the debate over ‘what is new’ is finally put to rest. Those residential property investors buying new (previously unoccupied) properties need not worry as their entitlements to claim Division 40 plant and equipment depreciation remain as per the following extracts from the Release and the Explanatory Notes:
“The Government will limit plant and equipment depreciation deductions for investors in residential investment properties to assets not previously used.”
“Often developers will acquire and install various depreciating assets in the course of constructing or substantially renovating residential premises. In some cases the property may already have an owner, but in others, the developer or other entity may hold the land and it will not be sold until after construction and installation. In these situations, in which a new asset is installed in new premises, the value of the asset has not yet declined and there is no risk of the valuation of the asset for the purposes of depreciation being refreshed. Accordingly, the amendments do not apply to an asset installed in new residential premises (including substantially renovated premises) if no entity has previously been entitled to any deduction for the decline in value of the asset and no one has resided in the premises in which the asset has been used.”
Example 2.1 of the Explanatory Notes also clarifies items acquired second-hand. In this example, a washing machine is acquired second-hand from a friend and installed within a rental property. Following the ‘not previously used’ analogy, the property owner is not entitled to depreciation of the washing machine because it is previously used.
Public consultation on the exposure draft legislation and explanatory material will run for four weeks, closing on Thursday, 10 August 2017. Refer above link for more information.
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It’s been a little over two weeks now since the Australian Government released an Exposure Draft Legislation formalising the proposed changes introduced in the 2017 Budget (for a full transcript please follow the link: https://treasury.gov.au/ConsultationsandReviews/Consultations/2017/Housing-Tax-Integrity).
Having had time to take it all in, review industry opinion and attend an AIQS Webinar on the subject, I have put together a bullet point summary of what we know thus far:
- First and foremost, investment property depreciation comprises depreciation on the building (Division 43) and depreciation on the plant and equipment (Division 40)*. The changes relate to Division 40 depreciation only.
- It is important to note that the changes relate to contracts entered into after 7:30PM on 9 May 2017 i.e. the changes relate to the contract date not the settlement date.
- Investors who entered into contracts prior to 7:30PM on 9 May 2017 are not affected by the changes.
- The changes relate to residential properties only. Commercial properties are not affected by the changes.
- Investors who buy brand new ‘previously unoccupied’ properties are not affected by the changes and continue to claim depreciation on the Division 40 items.
- Investors who entered into contracts to buy existing ‘previously occupied’ residential properties post 7:30PM on 9 May 2017 are affected. These investors can no longer claim depreciation on the existing Division 40 items that came with the property. They will be able to claim depreciation on any new plant and equipment items they add or replace. In most situations, the investor will still require a Tax Depreciation and Capital Allowances Schedule in order to claim the Division 43 building depreciation, however, the requirement for a Schedule will be dictated by the age of the property or, if built prior to 15 Sep 1987, the extent of renovations completed by the previous owner.
- Investors take note, where you add or replace plant and equipment items they must be acquired new from a retailer in order to claim depreciation. Plant and equipment items acquired secondhand (via Gumtree, etc) cannot be depreciated.
We are liaising with the AIQS in relation to a couple scenarios and will relay information once to hand.
*such as carpets, blinds, appliances, hot water systems, air conditioning assets, fans, light fittings, smoke detectors, garage door motors, pool equipment, alarms, solar systems, etc.
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It is with pleasure that we announce that our Director, Simon Hanau, has been recognised by the Australian Institute of Quantity Surveyors (AIQS) as a Certified Quantity Surveyor (CQS).
A CQS:
represents the highest level of expertise within the profession, providing exemplary service and advice to clients
possesses defined Quantity Surveying competencies that clients value
has an internationally recognised badge of competence, benchmarked and transferable with standards applicable in other parts of the world
is recognised by the community, industry and governments as a professional and responsible contributor to the industry
has demonstrated outstanding Quantity Surveying competence and commitment to professionalism
is committed to the AIQS Code of Professional Conduct
has confirmed a commitment to excellence and currency of knowledge through their engagement in Continuing Professional Development (CPD) (source: www.aiqs.com.au)
Simon looks forward to continuing to maintaining the high standard that comes with being a CQS moving forward.
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2017 BUDGET COMMENT – WHAT IS “NEW”

How did the definition of “new” become so blurred overnight?
It has been a week since the Budget was presented and confusion reigns among some within the property industry as clarification is sought over what is considered new.
The confusion surrounds the circumstance where a developer constructs a block of units (for example) and, as part of each unit, there is plant and equipment (Division 40 Items i.e. dishwasher, oven, carpets, blinds, etc). As the developer paid for the plant and equipment items, there is suggestion that he/she may be considered the first owner thereby relinquishing any depreciation entitlements by the subsequent purchaser of the new unit?
For me the answer lies in the following:
Is the developer using the plant and equipment? Answer: No. The item remains unused (i.e. new).
Is the developer deriving a passive income from the plant and equipment? Answer: No.
Is the developer depreciating the plant and equipment? Answer: No.
From my perspective, the proposed changes intend to restrict plant and equipment depreciation so that the investor who acquires the property new, from the builder/developer and/or engages the builder to construct the property, is the only taxpayer claiming depreciation on the plant and equipment i.e. subsequent investors who acquire the property secondhand are not entitled to depreciate the same items again. Subsequent investors will be able to claim depreciation on items of plant and equipment where they replace or add such items.
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REDLINE WELCOMES BOND UNIVERSITY CADET TO THE TEAM

It is with pleasure that Redline Quantity Surveyors welcomes Bond University Scholarship Student, Jordan Hanau to the Redline Quantity Surveyors’ Team.
Jordan completed Year 12 at All Saints Anglican School, Merrimac in 2016 and was awarded a half scholarship to study at Bond University.
Jordan recently completed his first Semester of the two-year Bachelor of Construction Management and Quantity Surveying Degree achieving excellent results to date.
We look forward to offering Jordan valuable work experience throughout the course of his Degree.
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Indicative Depreciation Estimates

Did you know that we are more than happy to assist with your next investment property purchase by providing indicative estimates of potential depreciation deductions for FREE*?

We know from experience that it is quite difficult to crunch the numbers on a potential investment property acquisition when you are missing an estimate of one of your major tax deductions.

So, what are you waiting for, call us now on 1300 732 667. 

*Applies to properties located in South-East Queensland or Northern NSW only. Excludes properties that have already been purchased. Estimates are Indicative and are provided for feasibility purposes, therefore, cannot be used for Taxation purposes. Note, in some cases an estimate may not be possible where the property is unique, multi-million dollar properties, etc or where there is a lack of available information.
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If you’re thinking of purchasing property through your SMSF then you need to consider the Sole Purpose Test. In summary, the SMSF needs to operate for the sole purpose of providing Super benefits for it’s members. Therefore, anyone related to the Fund cannot use it or receive any benefit from it. For example, purchasing a holiday unit in your SMSF and then using it for your annual holidays is NOT allowed! For more information, please view the video via following link and/or talk to your tax advisor.
Source: Australian Taxation Office www.ato.gov.au
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Redline Quantity Surveyors are Registered Tax Agents as required by Law
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Simon Hanau (Director of Redline Quantity Surveyors) is an Associate of the Australian Institute of Quantity Surveyors
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