Getting the replacement costs right for plant, property and equipment is critical if insurance claims are to be paid for the full costs of replacement at the time of any loss. Have the wrong values for insurance and the repercussions will likely be fatal.

Quantity surveying can significantly lessen than risk.

A detailed report on the cost of building a house, commercial or industrial building will consider the projects completed design and documentation, including the completed architectural specifications, structural constraints, schedules of finishes and services designs/specifications.

•  Each year, you must decide on the values to be insured. How do you know your value estimate is correct?
•  For every year an independent professional estimate is not undertaken, it will compound an inadequacy in the amount your ‘guestimate’
•  Obtaining valuation allows you to take the risk chose to under insure or act otherwise.
•  Companies and individuals can fall into financial administration through incompetent insurance arrangements and insuring incorrect values.
•  Ultimately the relatively amounts you may be saving in premium will be far outweighed by the loss of your asset or your inability to reopen business.

For those who do not obtain professional valuations, it’s a little bit like playing Russian Roulette. There is a live round in the chamber. If a loss is triggered, what is your likely outcome? You can only get away with rolling the dice so many times.

Changes in climate, weather, economics, social medial, social unrest, human diseases, terrorism, country and even war risk, ARE ALREADY IMPACTING LABOUR AND MATERIAL COSTS, AVAILABILITY AND TIME LINES.

Isn’t it time you bit the bullet and took some good advice? This is a problem that will go away untreated.

For a relatively small cost, a professional estimate can be arranged so you may then determine just how much under-insurance risk your balance sheet can tolerate.

We want you to make informed risk decisions rather than suffering the outcome of a poor business decision and suffer a catastrophic outcome.

TAX DEPRECIATION SERVICE

A tax depreciation schedule is a professional report prepared by a suitably qualified Quantity Surveyor which shows the amount of depreciation able to be claimed in the property over the life of the building. Tax Depreciation schedules should last 40 years and include both the diminishing value method (which includes 100% deductions and pooling) and the prime cost method.

A report will identify each year, from the date of purchase, the total tax depreciation claim available to the property investor.

THE TWO CATEGORIES OF DEPRECIATION

1 CAPITAL ALLOWANCE (REFERRED TO AS DIVISION 43)

This deduction is based on the historical construction costs of the property which may include surveying, engineering, architectural and building fees. However this cost does not include the land acquisition cost and site preparation. For residential properties the property has to be built after the 15th/16th of September 1987 and commercial properties after July 1982. The rate of depreciation is fixed over either 25 or 40 years determined by criteria set by ATO legislation Typical Division 43 components are driveways, the building structure itself, concrete, carports and most other capital improvements.

2 PLANT AND EQUIPMENT (REFERRED TO AS DIVISION 40)

Plant and equipment asset items are depreciated at a higher rate than that applied to the building. Assets included in this class are predefined by ATO legislation and the rate of depreciation is determined by the Commissioner of Taxation. The rate of depreciation reflects the Commissioners interpretation on the effective life of the asset to produce assessable income. Typical plant and equipment items are air conditioners, blinds, carpets, curtains, door closers, hot water systems, ovens, range hoods and many other items.

Deductions are calculated based on opening or residual value of an asset, and depreciated through effective lives and depreciation rules as prescribed by the Australian Tax Office (ATO).

Benefits of having a recent Tax depreciation report

It is important that the report is undertaken by a qualified Quantity Surveyor and recognised Tax Depreciation Expert. MCG are industry leaders in the preparation of tax depreciation schedules and are members of the Australian Institute of Quantity Surveyor (AIQS), the Royal Institute of Chartered Surveyors (RICS) and registered tax agents.

Risk Mitigaters Strategists & MCG Quantity Surveyors have partnered together to ensure impartial professional Tax Depreciation & Construction costs advice for our clients is affordable, fast and professional – Nationwide.