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  1. #1

    Default Depreciation rate query from newbie investor

    Hey all!

    I purchased a rental property last year in October and now need to complete my first tax return. I ordered a chattels valuation for my depreciation expense but the report did not provide the rates. Most of them I found in the IR264 but not on the list are Heated towel rail, bathroom wall heater and rangehood. I would have thought these were very common household chattels so I wonder if they are not depreciable items? If they are does anyone know which rates to use for diminishing value?

    Would greatly appreciate any help on this as I'm stumped!

    Thanks in advance.

  2. #2
    Join Date
    May 2004
    Posts
    2,779

    Default

    Try these in the IRD Technical Tax area:

    General Depreciation Determination DEP 80: Residential Rental Property Chattels

    Interpretation Statement 10/01: Residential Rental Properties - depreciation of items of depreciable property ("IS 10/01")

  3. #3
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,595

    Default

    Hi neveah,

    www.valuit.co.nz are the main firm that provide chattels depreciation. They provide the depreciation rates as well!

    If you have used someone else, I would ask them for the rates as they are normally provided with 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.

  4. #4
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,595

    Default

    Otherwise use the depreciation rate finder on the IRD website, www.ird.govt.nz
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  5. #5

    Default

    Thanks Ross,

    I'm kind of gutted I didn't use valuit or another firm that provided the rates. I used the valuer that valued our house not realising there were better options out there. It wasn't any cheaper either!

    Neveah

  6. #6

    Default

    Thanks for this Artemis,

    I did refer to this and it was really helpful for some of the items on my report that weren't supposed to be depreciated, such as joinery, tiles etc. Unfortunately it doesn't mention the specific items I mentioned...

  7. #7
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,595

    Default

    Quote Originally Posted by neveah View Post
    Thanks Ross,

    I'm kind of gutted I didn't use valuit or another firm that provided the rates. I used the valuer that valued our house not realising there were better options out there. It wasn't any cheaper either!

    Neveah
    Unfortunately a lot of these other valuers, that value land and buildings, don't do a good job at valuing for tax purposes.

    For tax purposes, we need to know how much you purchased the chattel for, which is how a firm like Valuit do it, and they make sure they meet the tax requirements.

    A land and building valuer, generally tries to work out the value of something. This can be different from the cost!

    Also Valuit have around 20 items, whereas land and building valuers often only have a fraction of this.

    As for the rates to use, match your asset up to the closes you can find, then use that rate.

    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.

  8. #8

    Default

    Quote Originally Posted by Rosco View Post

    As for the rates to use, match your asset up to the closes you can find, then use that rate.

    Ross
    Thanks very much for your feedback Ross :-)

    I think now, applying common sense I'll apply the oven rate for the rangehood and the heatpump rate for the heated towel rail and bathroom wall heater :-)


 

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