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Thread: Depreciation

  1. #1
    Join Date
    Sep 2017
    Posts
    193

    Default Depreciation

    If I buy kitchen very cheap and put into rental property, can I get it valued and depreciate off real value or only what I pay?

  2. #2
    Join Date
    Oct 2013
    Posts
    1,621

    Default

    With any asset, you can only depreciate what you pay - never more.

    If the "very cheap kitchen" is going into a rental property that doesn't currently have a kithen (ie, new build or upgrade from a kitchenless unit), most of it won't be deductible at all - pretty much just the appliances really. If it's a replacement of an existing kitchen, you can *probably* claim the whole purchase in the year of payment as a repair, but there are some tests to meet. If there are significant upgrades involved, it's probably not deductible.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
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  3. #3
    Join Date
    Sep 2017
    Posts
    193

    Default

    OK thank you.

  4. #4
    Join Date
    Feb 2010
    Posts
    308

    Default

    Hi
    Just as an extra question if I may.?

    For those of you who could claim depreciation on their property's...back when you could.

    How did you decide between....

    1...claim depreciation each year then pay it back when you sell property

    2...don't deprecate at all and therefore you don't pay and thing back when you sell the property.

    Was it a case of "pay now or pay later" ?

    Thanks

    Richard

  5. #5
    Join Date
    Oct 2013
    Posts
    1,621

    Default

    That was an individual choice. Most people chose to go with the tax refund now and tax to pay eventually. Especially long term investors who were expecting to hold until or after retirement years. Why wouldn't you take an interest-free loan from the IRD? Your tax rate may well be lower when you sell, so you end up paying less back!
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.


 

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