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  1. #1

    Default Building valuation for depreciation

    Hi

    I am newbie and bought my property in NZ last year before moving to London for my OE.

    It is time to file my Non resident tax return and I was wondering if I could use the council valuation to determine the building value for use in the depreciation calculation?

    Any help is appreciated.

    Thanks

  2. #2
    Join Date
    Jun 2009
    Location
    Waiuku
    Posts
    43

    Default

    I would say it depends on what you want. If you are looking for the most precise (and usually bigger) depreciation I would do a private valuation including a chattels valuation. Be aware of clawback tax though. If you buy a 300k house have it for 5 years and depreciate it by 50k and sell it for 300k or more then you will have to pay tax on the 50K

    Odin

  3. #3
    Join Date
    Apr 2008
    Posts
    2,086

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    One alternative is to notify the IRD that you are not going to claim any depreciation.

    If you do this and then sell the property several years later, there will be no issue re recovered depreciation.

  4. #4
    Join Date
    Jun 2008
    Location
    Auckland/Tauranga/Gold Coast
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    Default

    Get a depreciation schedule done and claim the depreciation.

    If you get a claw back it is only paying back the tax that you already claimed and will be paid out of the proceeds of the sale so why not use the IRD's money now?

    Also if you never sell it you have forgone all that cashflow on the premise that you "might" get a clawback later.

  5. #5
    Join Date
    Jan 2009
    Location
    Northland
    Posts
    115

    Default

    There is no clawback on increase in land value though - so always pays to get an updated valuation when selling as well.

  6. #6
    Join Date
    Jun 2004
    Posts
    10,364

    Default

    Quote Originally Posted by tpr2 View Post
    Get a depreciation schedule done and claim the depreciation.

    If you get a claw back it is only paying back the tax that you already claimed and will be paid out of the proceeds of the sale so why not use the IRD's money now?

    Also if you never sell it you have forgone all that cashflow on the premise that you "might" get a clawback later.
    and any clawback on todays claim will be paid for with tomorrows devalued $

  7. #7
    Join Date
    Jun 2008
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    Quote Originally Posted by Wayne View Post
    and any clawback on todays claim will be paid for with tomorrows devalued $
    even better I hadn't even thought about that as an advantage. Excellent point.

  8. #8
    Join Date
    Jun 2004
    Posts
    10,364

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    Quote Originally Posted by tpr2 View Post
    even better I hadn't even thought about that as an advantage. Excellent point.
    win win for you - lose lose for IRD. Psst - don't tell them.

  9. #9
    Join Date
    Jan 2006
    Location
    Wellington
    Posts
    559

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    If you cant organise a chattel and building valuation you could use the purchase price and percentages given by the GV for land and improvements as something to depreciate from. As the people above are pointing out though you are losing a lot of opportunity to use the taxpayers money (In this case yourself) by not getting a chattel valuation.
    Doug

  10. #10
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,592

    Default

    Have a look at www.valuit.co.nz

    These are the only people I would use for a chattels valuation.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.


 

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