Can I do my own chattels valuation?

[milodavies]

I recently bought a property and am interested in depreciating the chattels. I have a valuation on the property (that previous owner did just prior to selling) that includes a single line item value for the chattels.

My question is, am I able to use this as the basis for doing my own chattels valuation? Can I take that single figure and make reasonable estimates on how that figure is broken up (ie. carpets, drapes, appliances, etc).

I would rather not have to go to the hassle of getting an independent chattels valuation, if I am able to use the figure I have got and make some reasonable assumptions about how it is broken down.

Any advice would be much appreciated.

Thanks

[tricky]

Ummm, I really think you need to talk to a company specialising in chattels depreciation.
It will not be a hassle. It will save you $$$$$ and pay for itself.

And that comment:

I have a valuation on the property (that previous owner did just prior to selling) that includes a single line item value for the chattels.

makes me uneasy. You might be the victim of an experienced investor.

[GJB68]

I agree with Tricky, why is it a hassel?

For around $300 you can get a professional company, Valuit being one of them to come a long and do it for you based on their experience and expertise.

One thing they say on their website is "Continual research is conducted by Valuit to ensure reporting methods are in accordance with IRD requirements and rulings".

How are you going to explain the figures you come to if the IRD come knocking or your accountant asks you?

If you are going invest and cut corners it can only spell trouble somewhere down the track.

Pay the professionals!

My 2 cents worth.

[pgflt]

Valuit

I agree with GJB68 110%
Paul

[xris]

I don’t see any problem with doing your own chattels valuation at all. In fact, a very large number of investors do just that.

I can see two reasons for paying for a professional valuation.

First, you are claiming absolutely everything you possibly can claim, right down to internal walls and nuts and bolts. In this case, because you are sailing so close to the wind and because there is a much greater potential that you get it wrong and over-claim. A registered valuation will help you if the IRD runs an audit.

Second, you have fallen for all the hype and misinformation flying around, in much the same way that people spend thousands of dollars attending courses, buying countless books, and engaging a mentor, just to buy a couple of rentals.

It’s very easy to value chattels, especially if you are just going to claim the ‘obvious’ things.

Carpet? Looks alright on purchase. Vendor says it was put in three years earlier. Rough guess that to recarpet the house would cost $5,000. Easy to arrive at current value of $2,000 (depreciated at 20.00% per annum S/L). Write down and document this, (figures are examples only please note). Do the same for other chattels.

There may also be a very good case for not claiming depreciation anyway. I am not advising this but in some cases I do not believe it is a clear cut as some people make out. Many moons ago there was an excellent thread on this very topic.

Back to the subject. If you want to claim the maximum possible for chattels, a reg. Valuation may be prudent. However, in doing so you are possibly creating further problems for yourself. For example, you should always bear in mind what will happen if you ever sell the property in the future. This may apply more to the building depreciation claimed, but it should also be borne in mind for chattels.

So unless you want to get every depreciation penny you can, then a simple self valuation of chattels will suffice.

I suggest running a search here to locate that past depreciation thread. As usual, I’m too lazy to do it myself.

xris

[Monid]

Just to add to Xris's post I believe the IRD guidance on rental income and depreciation in fact gives guidance on doing this yourself... Worth reading. If I recall rightly the long and the short of it was look in places like the trade and exchange to see what equavilent age items are selling for. Not rocket science.

Personally I am loath to pay $300 a pop for something that I can do myself in an easily justifiable manner. Gets expensive mighty fast.

David

[Perry]

Insurance companies will accept 'reasonable'
self-valuations for insurance purposes, so,
should the IRD . . . .