Chattels valuations

[hdb]

Good day

I just bought a brand new investment property in Dec 2013 , looking to have the Chattels valued

Any recommendation on chattel valuers in Papakura area

Many thanks

[artemis]

Good day I just bought a brand new investment property in Dec 2013 , looking to have the Chattels valued
Any recommendation on chattel valuers in Papakura area Many thanks

Valuit.co.nz

[epsomtax]

Valuit.co.nz

Yep, definitely Valuit. Other valuers will pick a number out of a hat, usually a very low number that is not that accurate. Valuit gives you a breakdown piece by piece with costs and dep. values. We recommend them to all our clients. We have no vested interest in doing so, other than that they're the best.

Regards
EpsomTax.com Ltd
Property Accountants

[Eljay1]

Silly question but I have some old properties, with original kitchens and bathrooms. I'm planning to upgrade these over time but obviously haven't had a chattels valuation. I also have a 40 year old property, bought last year, but with nice newish kitchen and bathroom. I get 300 pw rent for that one. I've never had chattels valuations on any of them as I thought it's not really worth it for cheaper properties. Am I right?

Yep, definitely Valuit. Other valuers will pick a number out of a hat, usually a very low number that is not that accurate. Valuit gives you a breakdown piece by piece with costs and dep. values. We recommend them to all our clients. We have no vested interest in doing so, other than that they're the best.

Regards
EpsomTax.com Ltd
Property Accountants

[epsomtax]

Silly question but I have some old properties, with original kitchens and bathrooms. I'm planning to upgrade these over time but obviously haven't had a chattels valuation. I also have a 40 year old property, bought last year, but with nice newish kitchen and bathroom. I get 300 pw rent for that one. I've never had chattels valuations on any of them as I thought it's not really worth it for cheaper properties. Am I right?

If you have made substantial changes to the properties thru upgrades, as you mention, then you could justify revaluations of the affected chattels based on these. Possibly much of the kitchen and bathroom upgrades would not be depreciable, as these would generally be improvements rather than r&m. But talk to your accountant about the situation specifically... Unfortunately, with the rest of the chattels, if you've never depreciated them since purchase you can't start now.

[Rosco]

Silly question but I have some old properties, with original kitchens and bathrooms. I'm planning to upgrade these over time but obviously haven't had a chattels valuation. I also have a 40 year old property, bought last year, but with nice newish kitchen and bathroom. I get 300 pw rent for that one. I've never had chattels valuations on any of them as I thought it's not really worth it for cheaper properties. Am I right?

Hi Eljay1,

I'll separate your question into a few parts

1) if you have owned rentals for a number of years, then if you replace the bathrooms and kitchens, this work will most likely be a repair. As long as you are just bringing the items back to the original standard (when the house was built) then it will be a repair. If you extend or overly improve, then it is likely to be an asset!
A number of years ago IRD challenged what we could depreciate as chattels, and by doing so made it clear that kitchens and bathrooms were part of the building and not chattels. Therefore we cannot depreciate these items as chattels, but when doing renovations and repairs we have to consider the whole building, meaning the work is normally a repair.

2) when you buy a property, you generally make a decision to chattels depreciate or not. Best to do it straight away and within the first tax return. If you missed the first year, IRD would not like you changing but most property experts/tax experts would argue that you technically could. After the first year or two of being missed, it becomes a bit difficult to work out the opening balances.

3) with older properties it depends on what the chattels are. I look at the major five items, carpet, curtains, dishwasher, heaters/heat pumps and stove. If these are of reasonable value, then go for it. There are also lots of smaller items that are depreciated, and some at lower rates such as driveways.

4) if you buy and then do up straight away, then you would use the cost price of your chattels.

Hope this helps

Ross

[epsomtax]

thx for the extra detail Ross.

[Eljay1]

Thanks both of you for the replies. Rosco, that extra info is also really helpful. I've emailed them re one of the properties so we'll see what happens as I'm not sure if they cover Timaru area.

Hi Eljay1,

I'll separate your question into a few parts

1) if you have owned rentals for a number of years, then if you replace the bathrooms and kitchens, this work will most likely be a repair. As long as you are just bringing the items back to the original standard (when the house was built) then it will be a repair. If you extend or overly improve, then it is likely to be an asset!
A number of years ago IRD challenged what we could depreciate as chattels, and by doing so made it clear that kitchens and bathrooms were part of the building and not chattels. Therefore we cannot depreciate these items as chattels, but when doing renovations and repairs we have to consider the whole building, meaning the work is normally a repair.

2) when you buy a property, you generally make a decision to chattels depreciate or not. Best to do it straight away and within the first tax return. If you missed the first year, IRD would not like you changing but most property experts/tax experts would argue that you technically could. After the first year or two of being missed, it becomes a bit difficult to work out the opening balances.

3) with older properties it depends on what the chattels are. I look at the major five items, carpet, curtains, dishwasher, heaters/heat pumps and stove. If these are of reasonable value, then go for it. There are also lots of smaller items that are depreciated, and some at lower rates such as driveways.

4) if you buy and then do up straight away, then you would use the cost price of your chattels.

Hope this helps

Ross