How a Tax Depreciation Schedule is conducted through
 NAF DEPRECIATIONS

• NAF Depreciations conduct a Site visit.

The Site Visit

Once we have organised a convenient time to complete a site visit, we:

• Inspect the property both inside and outside

• Documentation of all elements is noted

If all documentation requested has not been submitted prior to this date, it is vital that the Client provide this on the site visit date. This will ensure that no delays occur.

With all the required information from the site visit we can determine the value at the time of construction of that specific building and improvements.

NB. It would be of great value for the client to have a copy of the plans of the property at the time of the inspection; however this is not mandatory as we photograph inside and outside of the property.

• NAF Depreciations produce a Schedule. 

The Schedule

Once the site visit has been completed, we produce a schedule utilizing the Methodology and Terminology of Division 40 – Depreciation of Plant & Division 43 – Deductions for Capital Works:

 
Methodology & Terminology

Methodology

The Taxation Depreciation Schedules are based solely on the information provided to us by the clients, including Site Visit written information and Photographs. The rates used relate to the construction period for the specific building type and its demographics. 

Terminology

To create a schedule we are obliged to use two principle guidelines, these being Division 40 and Division 43. The significance of these Divisions are explained and highlighted below: - 

Division 40 – Depreciation of plant

The method for ‘depreciation of plant’ used to create this schedule is based on the guidelines set by TR 2006/15. This set of guidelines clearly identifies the items, which are depreciable, some being carpets, hot water service, etc, and also the effective lives of each item.

This schedule has been prepared utilizing the current legislation in force and all of the costs associated with the ‘depreciation of plant’ in this schedule were estimated and ascertained from current market conditions.                                                 

Division 43 – Capital works deductions

‘Capital works deductions’ include the construction costs associated with the property under consideration, and also including all external works, and any structural improvements which may have been undertaken.

The rates to calculate the capital works deductions are 2.5% for both the building works and also the external works.