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  1. #1
    Join Date
    Sep 2013
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    Auckland
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    777

    Default The chattels valuation and depreciation thread

    This topic is a bit of a grey area. Many people recommend paying for a professional chattels valuation. This isn't the only option though. You can do it yourself. Hopefully this info will help anyone looking to do their own valuation.

    Residential rental property chattels list from ird website. See page 24 of pdf for the list.

    Asset class / Estimated useful life (years) / Diminishing value banded depreciation rate (%) / Straight-line equivalent banded depreciation rate (%)


    Chattels (not elsewhere specified) 5 33 24


    Appliances (small) 4 40 30
    Bedding 3 50 40
    Blinds 8 22 15.5
    Carpets (modular nylon tile construction) 15.5 12 8
    Carpets (other than modular nylon tile construction) 5 33 24
    Compact disc players 5 33 24
    Compact discs 1 100 100
    Crockery 3 50 40
    Curtains 8 22 15.5
    Cutlery 3 50 40
    Digital versatile disc (DVD) players 5 33 24
    Digital versatile disc (DVDs) 2 63.5 63.5
    Dishwashers 6.66 26 18
    Drapes 8 22 15.5
    Dryers (clothes, domestic type) 6.66 26 18
    Freezers (domestic type) 8 22 15.5
    Furniture (fitted) 15.5 12 8
    Furniture (loose) 10 18 12.5
    Glassware 3 50 40
    Heaters (electric) 3 50 40
    Heaters (gas, fitted) 8 22 15.5
    Heaters (gas, portable) 5 33 24
    Integrated silk flower arrangements 2 63.5 63.5
    Lawn mowers 4 40 30
    Light fittings 10 18 12.5
    Linen 3 50 40
    Microwave Ovens (domestic type) 6.66 26 18
    Ovens (domestic type) 8 22 15.5
    Paintings and drawings, in either case being property
    the value of which might reasonably be expected in
    normal circumstances to decline in value
    20 9.5 6.5
    Prints (including limited edition prints) 10 18 12.5
    Refrigerators (domestic type) 8 22 15.5
    Stereos 5 33 24
    Stoves (domestic type) 8 22 15.5
    Televisions 5 33 24
    Utensils (including pots and pans) 3 50 40
    Vacuum cleaners (domestic type) 3 50 40
    Video game discs 1 100 100

    Here is another useful thread on the topic - You’re missing out if you haven’t had a chattels valuation done!

    Items that propertytalk members have suggested are depreciable:

    Driveways
    Fences
    Retaining walls
    Wooden decks
    Last edited by donthatetheplayer; 19-02-2014 at 05:47 PM. Reason: Update list

  2. #2
    Join Date
    Sep 2013
    Location
    Auckland
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    777

    Default

    Are retaining walls and/or stonewall fences (like the ones in Mt Eden) depreciable?

  3. #3

    Default

    Yes those are the depreciation rates listed but you still have to have "independent" source for the actual valuation & this generally can only be done by a registered valuer .The valuation should be close to the purchase date of the property. I used Valuit , they provided a good service & indepth listing of the chattels which amounted to 50k.The average depreciation rate was around 7% .The cost of the report was $500 but this will be recovered in the first year of tax return for the property purchased with $3500 tax savings based on 7% of 50k.
    Wooden decks can also be depreciated as can driveways & fences too.

  4. #4
    Join Date
    Sep 2013
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    Auckland
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    Default

    My understanding is that you can do it yourself. You just have to be able to justify the value of the items you are depreciating. This can be done by looking at comparable prices on trademe for many things. This is the "independent" source. It gets harder for things like driveways and retaining walls.

    mrsaneperson - were there any other items not listed above that were included in your valuation?

  5. #5

    Default

    Perhaps you can do it yourself but its much more likely to be challenged & it will take you some time . The same goes for insurance claims where insurance will ask for proof of valuation they generally will not accept anything other than a receipt or a valuation from a recognised person in the industry.

    The scope of the report i received was quite extensive .
    Depreciable items mentioned: light fittings,water heater,stove, fitted furniture,fans,handrails, mail boxes,pavers, smoke detectors,driveways & paths, clotheslines , sheds etc.

    I would think retaining walls would be included.

    There is a 3 point test for determination:
    1.Plugged into a socket
    2.Not attached to a building ex.driveway
    3.Attached to a building i.e integral

  6. #6
    Join Date
    Mar 2013
    Location
    Auckland
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    1,666

    Default

    I got one done by the same company as above but thought that some of the values given were well off. Perfect example was the floating wooden floor that I'd installed myself for about $1700. It was valued at about $22 000.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  7. #7

    Default

    Quote Originally Posted by sidinz View Post
    I got one done by the same company as above but thought that some of the values given were well off. Perfect example was the floating wooden floor that I'd installed myself for about $1700. It was valued at about $22 000.
    WOW thats certainly in your favour though.

  8. #8
    Join Date
    Mar 2013
    Location
    Auckland
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    Default

    On the face of it, yes, but how would you justify depreciating to the tune of a value more than ten times what you know it cost, if you got audited?
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  9. #9
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,594

    Default

    Obviously with your floor there has been a mistake. They normally would ask you for records of the cost of items first, and record at your $1,700 cost. So you should fix this to $1,700.

    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.

  10. #10

    Default

    Quote Originally Posted by sidinz View Post
    On the face of it, yes, but how would you justify depreciating to the tune of a value more than ten times what you know it cost, if you got audited?
    True! A few years back i asked my bank for a statement of interest i'd paid on my mortgage loan for a rental. They sent me a letter staing it was 30k. I thought that sounded too high & found theyd made a mistake ,it was only around 17k. Pretty careless mistake on the banks part as if i hadnt checked i could have unknowingly entered the wrong figure on my yearly accounts.


 

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