Chattel Value for depreciation

[NORM]

Could someone please give me the rundown on chattel values for depreciation purposes?

On a sale and purchase agreement is an item for chattel value. If this is left blank, can I get a chattel valuation done, for the rental property, soon after purchase and use this for depreciation calculation? Is this the best way to go about chattel valuation when purchasing a rental?

Thank you
Norm

[fudosan]

Welcome to the forum NORM.

What I prefer is after settlement and before doing any renovation, get a chattel valuer such as Valuit to do a chattel valuation, and then ask my accountant at the end of the year to work out the depreciation.

[janesco]

Yep I agree with Fudosan.

The chattels valuation on the S & P agreement is worth nothing as far as a Property Investor is concerned.

I use Valuit.... and I work out the basics for the accountant. The report from Valuit makes it very easy to sort out.

No I am not employed by, nor in any way paid by, valuit.

Of course things could change with depreciation scales over the next year. Thank you Michael Cullen. I watch with interest

[muppet]

Hi Norm

Go to http://www.valuit.co.nz for more info on chattel valuations.

You can also do a search for Warren as he is one of the principals of Valuit and has contributed answers to posters re chattel valuations.

Regards

[fudosan]

My experience with Valuit as a client has been very good. (I am not assoicated with it, though.)

[Warren]

NORM, all of the comments by the formites are correct.

Of course things could change with depreciation scales over the next year. Thank you Michael Cullen. I watch with interest

We are all watching with interest! Since the submissions were put in by the end of September 2004 we have not heard from the IRD. What we believe will happen is that there will be a change of rates (what the IRD was proposing will possibly see some depreciation rates increase and some will decrease) - as to what the overall effect to the investor will be we have to wait and see. It will still be beneficial to have a full chattel valuation completed in the majority of instances. With the proposed changes it could also be more imperative to have one completed to ensure you are maximising the cash flow from your IP. If you are unsure if your property will benefit from a chattel valuation give Valuit a call and talk it through.

What I prefer is after settlement and before doing any renovation

Great point. We must inspect the property in the condition that you purchased it. Valuit apportions the purchase price over the entire property as the purchase price reflects age, condition etc. You can still gain any depreciation benefits of renovations by retaining your receipts and taking these to your accountant. Things such as tidying up the garden, a splash of paint are not an issue. What we do consider renovations is replacement of curtains, light fittings, new kitchens etc.


Thanks for all of the positive feedback. It is appreciated (and I do work for Valuit!)

Regards

[NORM]

Thank you all for the info.

Regards
Norm