Is this an expense?

[seema]

Hi all

Is painting the roof is an expense or will the IRD view this as an improvement for capital gain? Or does this need to be depreciated over a period of time?

thanks in advanace

[revdev]

Sounds an expense all day long to me, especially so if the roof already has paint (i.e. you are going to re-paint).
Maybe if the house was a very recent purchase, they could argue it's an improvement. In that case wait a period of time (12 months?) and then do it.

[seema]

The owner painted the roof as a part of renovation and we were told he spent 5k to do that. So just wondering is it possible to depreciate if we choose to buy this property. Sorry I should have told you the whole story.

[Anthonyacat]

The owner painted the roof as a part of renovation and we were told he spent 5k to do that. So just wondering is it possible to depreciate if we choose to buy this property. Sorry I should have told you the whole story.

The roof is not a separate asset, neither is the paint, so no it can't be split from the purchase price of the house and depreciated separately.

[Wayne]

As Anthonyacat says - expense it if you are doing it or if buying (which it seems you are) it is just the 'roof'.

[k1w1guy2]

As above - Its not an expense that you can claim for as it will be part of the purchase price of the overall property.

[Wayne]

The key really is that you didn't spend the money on the painting so how could you claim it?

[seema]

Ok we understand why we can't depreciate roof painting. What if we buy a renovated property with new carpet, new oven, new range hood etc. We still don't pay separately for these items as these items come as part of the house. I think these items are depreciable. If so, does anyone know what the process is? Do we ask for the invoices from the owner or do we have to get a valuer to assess the value of the chattels? What kind of evidence might IRD ask for in case we choose to depreciate chattels especially for a renovated house?
Thanks to all members for their contributions. We are just trying to understand this idea of depreciation.

[revdev]

....or do we have to get a valuer to assess the value of the chattels?

Now, you are on the right track.

[cube]

The stove etc. are chattels that can be removed. Good luck removing the paint from the roof. It forms part of the building as much as the foundations, walls and plumbing do, so, according to the powers that be, doesn't depreciate.

[Wayne]

do we have to get a valuer to assess the value of the chattels? What kind of evidence might IRD ask for in case we choose to depreciate chattels especially for a renovated house?

Yes - get a valuer.
That is the evidence required.

[Rosco]

Only use www.valuit.co.nz to get a chattels valuation done.

Normal land and building valuers just don't understand this and don't maximise your claims.

Ross