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Rentals with a quantity surveyor report

Writer's picture: Nyssa GowerNyssa Gower

Updated: Dec 20, 2023

For rentals with a quantity surveyor report - it can create a positive cash flow and with a negative income for tax.



House on a pile of money


When should I get a quantity surveyor report?

If the rental property purchased is relatively new, or you have purchased it and then undergone some major renovations - it's worth getting a quantity surveyor report.


This report will advise you how much you can claim in capital allowances and capital works for up to the next 40 years.


Why can't my accountant just do it?

A quantity surveyor is a tertiary qualified professional who specialises in building measurement and estimates the value of construction costs.


Although they are required to be registered tax agents, and should be members of the Australian Institute of Quantity Surveyors (AIQS), this specialisation makes them different to accountants.



Why should I get one?

  1. If the quantity surveyor cannot see that you will receive the same benefit in tax savings as the depreciation amount your property has available, they won't charge/prepare the report.

  2. Depreciation is an 'expense' you can claim that isn't actually incurred every year - only at the start on purchase.

  3. It can result in a 'tax loss' even though you're cash positive.

  4. You get 100% tax deduction for an item that may only receive a 50% discount on sale (depending on what entity you purchased the house in)


How can this result in a better tax position?

Example

An example of cash vs tax net rental income

Will this affect my Capital Gains on sale?

Yes. The deduction you claim now will result in the 'cost base' of your property reducing by the amount you claim in Capital Works.


Example

  1. You purchase a rental property for $540,000.

  2. Your quantity surveyor issues a report to claim $10,000 per annum in Capital Works.

  3. You sell your property after 10 years for $640,000 (ie more than 12 months).

  4. You owned the property either as an individual or through a trust that distributes the capital gain to an individual.


An example of a capital gain when claiming capital works versus not


More information





Referrals









To discuss any of the above further, you can ring Super Accounting on 07 4021 2801.


''Play by the rules, but be ferocious." - Phil Knight

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The information I have provided you is purely factual in nature and does not take account of your personal objectives, situation or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice you should consult an appropriately licensed or authorised financial adviser

©2024 by Super Accounting with Nyssa Gower.

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