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Ashkeroth(Initiate)Initiate
3 Jan 2022

Hi community. I am soon renting my small apartment for the first time and I believe I can claim depreciation. During my settlement, the seller (a property developer) gave me a table which is outline how the depreciation can be used but it is not the "Full report".


I was also offered to buy a full 'depreciation report' from a third party (like Washington Brown) which I am suppose to buy and that is "ATO certified as a depreciation schedule for taxation".


My question is - can I simply just use the table that the seller gave me or do I have to pay an additional 700 AUD to buy a "depreciation report" by companies like Washington Brown etc?


The ATO seems to provide all the calculators needed and with my table from the seller on my property - will it be sufficient in the legal sense to use it to lodge my return? What is the legal aspects concerning depreciation reports? How does their paid report more legal or "for taxation purposes"?


Thank you.


Warm regards,

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BlakeATO(Community Support)Community Support
ATO Certified Response5 Jan 2022

Hi @Ashkeroth


If you know the actual costs, you don't need a quantity surveyor report. However, if you don't, you will need a report from a quantity surveyor to obtain the correct current values. You can claim an immediate deduction for the full cost of the report in the year you incur the cost, though.


You can read about working out your capital works deduction on our website.

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Most helpful replyATO Certified Response

BlakeATO(Community Support)Community Support
ATO Certified Response5 Jan 2022

Hi @Ashkeroth


If you know the actual costs, you don't need a quantity surveyor report. However, if you don't, you will need a report from a quantity surveyor to obtain the correct current values. You can claim an immediate deduction for the full cost of the report in the year you incur the cost, though.


You can read about working out your capital works deduction on our website.

Ashkeroth(Initiate)Initiate
12 Jan 2022

Hi BlakeATO,


Thank you for taking your time for my question. I have been provided the costs for the first 10 years but from your link (very helpful), a property can last well over 10 years (40 years in the ATO website that you have provided).


It seems obtaining the costs through a quantity surveyor is important to obtain the right values in my current situation.


I have been thinking about CGT event in conjunction with having a depreciable asset like a property.


Because I claim depreciation when I rent out successfully, I am able to reduce my taxable income. Does this mean if I decide to sell the property, the new cost base is the original amount less the depreciation cost that I submitted to ATO?


For example:

Assume the apartment was 600000 AUD

And I rent it out and my surveyor indicate I can depreciate 15000 AUD in year 1, 12000 AUD in year 2.


Then on year 3, I sell for 650000 AUD. What will the CGT be to include in my Year 3 taxable income at the EOFY?


Will the answer be 650000 - (600000 - 15000 - 12000) = 77000 AUD or simply 50000 AUD? @BlakeATO

ATO Certified Response
JodieR_ATO(Community Support)Community Support
ATO Certified Response12 Jan 2022

Hi @Ashkeroth,


Your thinking is correct. The new costbase amount takes into consideration the amounts already depreciated. So if you purchased the property for $600k less what you've claimed for depreciation $27k, your new cost base is $573k. If you sell the property for $650k your capital gain is $650- $573 = $77k total capital gain.


If you owned the property 12mnths+ you can then apply the CGT discount. This means you report $77k at Total capital gain label and $38500 at Net capital gain label. This is also the label we apply your marginal tax rates to.


You can look at the example under Karl and Louisa to help you work out your CGT.

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