I own an IP that is large enough to put build an additional dwelling at the rear. My question relates to how to value the capital improvements that will result from the additional dwelling. I understand that I have to use the actual cost value of the new building and not the value that a valuer would give me after it was built. However, if I provide all the labour myself (for which I can provide no receipt), then the value of the new building is going to be less than it should be. Is there any way that I can obtain a market value (that includes the value of my labour) for the new building and use that as the original cost for depreciation? And as it is a new building, how would I apportion the value between building and chattels (i.e. wiring plumbing fit out etc.) if I have to value it only using the receipts for building it. Also, does it make any difference if the new dwelling is part of the original IP or if it is subdivided off and becomes a separate and new IP? At what point can I class it as a new IP, and thus use a registered valuer to give me a new valuation that properly apportions the land cost (which to me would be nil) and the building, and the chattels.
Any help would be greatly appreciated.
Any help would be greatly appreciated.
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