Phase A - Tax Depreciation Estimate 2-6 Lord Street RICHMOND, VIC 3121 x x
BMT Tax Depreciation Property Depreciation and Construction Cost Consultants ABN 44 115 282 392 May 1, 2009 Level 50, 120 Collins Street GPO Box 4260 Melbourne VIC 3001 t f e w 03 9654 2233 03 9654 2244 info@bmtqs.com.au www.bmtqs.com.au BMT Tax Depreciation provide an Australian wide Service with offices in Sydney, Melbourne, Brisbane, Newcastle, Canberra, Adelaide and Perth. Mr Dustin Wu Andah Pty Ltd Suite 312/1 Princess Street KEW, VIC 3101 Re: Dear Dustin, Please find attached our tax depreciation estimates for the above property detailing the depreciation and associated tax allowances that may be available to the owner under the Income Tax Assessment Act 1997 (ITAA97). This document is intended to provide a guide to the potential depreciation and building allowances available from the purchase of the above residential property, facilitating the estimation of the after tax return on the investment over the first 10 full years of ownership. 1.0 Information The following information was used in the preparation of the schedules: Written and verbal information provided by Andah Pty Ltd. 2.0 Depreciation Potential Plant and Capital Allowance The purchaser of the property, intending to use it for income producing purposes, is entitled to depreciation including: Division 40, Depreciation of Plant and ; and, Capital Works allowance (2.5%pa). The depreciation of plant and equipment items is based on the diminishing value effective life rates as published by the commissioner of taxation (TR2006/C5). In the scenario where plant and equipment items are not sold at an agreed value these items will be depreciated on the basis of a just attribution of the total expenditure (42-65 ITAA97). The allowance for capital works will be based on the historical cost of construction less nondepreciable items. 2-6 Lord Street, RICHMOND, VIC 3121 1 File No: 103926
BMT Tax Depreciation 3.0 Capital Work Allowance The building will be constructed after the 18th July 1985 and therefore qualifies for the capital works allowance of 2.5%pa. 4.0 Estimate Calculation This report is based on a just attribution of the total expenditure to estimate the allowances for plant. The estimates provided are based on the sale price as indicated, as the final purchase price at this time is not known. This estimate has been provided for the purpose of informing the investor of the depreciation potential. Different depreciation returns are available and are influenced by the purchase price of the property. Please note that the first year calculations are based on ownership over a full financial year. 5.0 Disclaimer This report has been based on very preliminary documentation, and the figures provided should be treated as a guide only. As documentation improves, BMT Tax Depreciation will be able to provide more accurate estimates of depreciation. 6.0 Conclusion As can be extracted from the attached tables, the units will obtain maximum depreciation potential within the first 5 years of ownership. BMT Tax Depreciation would be pleased to provide a complete detailed tax depreciation report on any of the units in the above property upon request. Our results suggest employing a specialist to maximise the various tax allowances has a significant effect on improving the after tax return. Should you or the purchaser wish to discuss the contents of this report in more detail, please do not hesitate to contact Bradley Beer of this office. Yours Sincerely, BMT Tax Depreciation Pty Ltd Quantity Surveyors 2-6 Lord Street, RICHMOND, VIC 3121 2 File No: 103926
BMT Tax Depreciation Appendix One Phase A Tax Depreciation Estimate 2-6 Lord Street RICHMOND, VIC 3121 2-6 Lord Street, RICHMOND, VIC 3121 3 File No: 103926
Typical 1 Bedroom Apartment, $351,750 1 7,070 3,749 10,819 2 3,659 3,749 7,408 3 3,190 3,749 6,939 4 2,759 3,749 6,508 5 2,346 3,749 6,095 6 2,423 3,749 6,172 7 1,907 3,749 5,656 8 1,312 3,749 5,061 9 930 3,749 4,679 10 677 3,749 4,426 11 + 3,793 112,473 116,266 $8,000 $30,066 $149,964 $180,030 1 5,533 3,602 9,135 2 2,864 3,602 6,466 3 2,497 3,602 6,099 4 2,159 3,602 5,761 5 1,836 3,602 5,438 6 1,896 3,602 5,498 7 1,492 3,602 5,094 8 1,027 3,602 4,629 9 728 3,602 4,330 10 530 3,602 4,132 11 + 2,968 108,063 111,031 $23,530 $144,084 $167,614 $70,000 $60,000 $50,000 $40,000 $30,000 $10,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 1 Bedroom Apartment, 103926
Typical 1 Bedroom Apartment, $456,750 $16,000 1 8,187 5,212 13,399 2 4,778 5,212 9,990 3 3,861 5,212 9,073 4 3,357 5,212 8,569 5 3,052 5,212 8,264 6 2,782 5,212 7,994 7 2,245 5,212 7,457 8 1,787 5,212 6,999 9 1,274 5,212 6,486 10 938 5,212 6,150 11 + 5,430 156,350 161,780 $37,691 $208,467 $246,158 $8,000 1 6,407 5,007 11,414 2 3,740 5,007 8,747 3 3,021 5,007 8,028 4 2,627 5,007 7,634 5 2,389 5,007 7,396 6 2,177 5,007 7,184 7 1,757 5,007 6,764 8 1,399 5,007 6,406 9 997 5,007 6,004 10 734 5,007 5,741 11 + 4,250 150,219 154,469 $29,498 $200,291 $229,789 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $10,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 1 Bedroom Apartment, 103926
Typical 1 Bedroom Apartment, $537,600 $16,000 1 8,234 6,153 14,387 2 5,391 6,153 11,544 3 4,308 6,153 10,461 4 3,689 6,153 9,842 5 3,125 6,153 9,278 6 3,073 6,153 9,226 7 2,459 6,153 8,612 8 1,969 6,153 8,122 9 1,409 6,153 7,562 10 1,040 6,153 7,193 11 + 6,115 184,577 190,692 $40,812 $246,103 $286,915 $8,000 1 6,444 5,911 12,355 2 4,219 5,911 10,130 3 3,371 5,911 9,282 4 2,887 5,911 8,798 5 2,445 5,911 8,356 6 2,405 5,911 8,316 7 1,924 5,911 7,835 8 1,541 5,911 7,452 9 1,103 5,911 7,014 10 814 5,911 6,725 11 + 4,785 177,339 182,124 $31,938 $236,451 $268,389 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $10,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 1 Bedroom Apartment, 103926
Typical 2 Bedroom Apartment, $624,750 1 9,292 7,899 17,191 2 6,506 7,899 14,405 3 5,167 7,899 13,066 4 4,365 7,899 12,264 5 3,670 7,899 11,569 6 3,349 7,899 11,248 7 2,928 7,899 10,827 8 2,144 7,899 10,043 9 1,811 7,899 9,710 10 1,332 7,899 9,231 11 + 7,708 236,956 244,664 $48,272 $315,942 $364,214 $16,000 $8,000 $120,000 1 7,272 7,589 14,861 2 5,091 7,589 12,680 3 4,044 7,589 11,633 4 3,416 7,589 11,005 5 2,872 7,589 10,461 6 2,621 7,589 10,210 7 2,291 7,589 9,880 8 1,678 7,589 9,267 9 1,418 7,589 9,007 10 1,042 7,589 8,631 11 + 6,033 227,664 233,697 $37,778 $303,552 $341,330 $100,000 $80,000 $60,000 $40,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 2 Bedroom Apartment, 103926
Typical 2 Bedroom Apartment, $775,950 1 9,991 9,427 19,418 2 7,567 9,427 16,994 3 6,328 9,427 15,755 4 5,238 9,427 14,665 5 4,338 9,427 13,765 6 3,873 9,427 13,300 7 3,173 9,427 12,600 8 2,584 9,427 12,011 9 1,957 9,427 11,384 10 1,711 9,427 11,138 11 + 9,699 282,821 292,520 $56,459 $377,095 $433,554 $16,000 $8,000 1 7,819 9,058 16,877 2 5,922 9,058 14,980 3 4,953 9,058 14,011 4 4,100 9,058 13,158 5 3,395 9,058 12,453 6 3,031 9,058 12,089 7 2,483 9,058 11,541 8 2,022 9,058 11,080 9 1,532 9,058 10,590 10 1,339 9,058 10,397 11 + 7,591 271,730 279,321 $44,187 $362,307 $406,494 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 2 Bedroom Apartment, 103926
Typical 2 Bedroom Apartment, $892,500 1 10,048 9,579 19,627 2 7,738 9,579 17,317 3 6,443 9,579 16,022 4 5,308 9,579 14,887 5 4,379 9,579 13,958 6 3,897 9,579 13,476 7 3,189 9,579 12,768 8 2,586 9,579 12,165 9 1,958 9,579 11,537 10 1,722 9,579 11,301 11 + 9,829 287,373 297,202 $57,097 $383,164 $440,261 $16,000 $8,000 1 7,863 9,203 17,066 2 6,056 9,203 15,259 3 5,043 9,203 14,246 4 4,154 9,203 13,357 5 3,427 9,203 12,630 6 3,050 9,203 12,253 7 2,496 9,203 11,699 8 2,024 9,203 11,227 9 1,533 9,203 10,736 10 1,347 9,203 10,550 11 + 7,692 276,103 283,795 $44,685 $368,138 $412,823 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 2 Bedroom Apartment, 103926
Typical 3 Bedroom Apartment, $1,347,150 1 13,011 16,287 29,298 2 10,211 16,287 26,498 3 8,093 16,287 24,380 4 6,717 16,287 23,004 5 5,590 16,287 21,877 6 5,253 16,287 21,540 7 4,252 16,287 20,539 8 3,275 16,287 19,562 9 2,777 16,287 19,064 10 2,167 16,287 18,454 11 + 14,246 488,612 502,858 $75,592 $651,483 $727,075 $32,000 $28,000 $24,000 $16,000 $8,000 $250,000 1 10,183 15,648 25,831 2 7,991 15,648 23,639 3 6,333 15,648 21,981 4 5,257 15,648 20,905 5 4,375 15,648 20,023 6 4,111 15,648 19,759 7 3,327 15,648 18,975 8 2,563 15,648 18,211 9 2,174 15,648 17,822 10 1,696 15,648 17,344 11 + 11,149 469,451 480,600 $59,159 $625,935 $685,094 $200,000 $150,000 $100,000 $50,000 Diminishing Value method of depreciation applying Low-Value Pooling. The Write Off Typical 3 Bedroom Apartment, 103926