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Working Out Your Depreciations with Excel
If you have the room, building a granny flat on your property can prove to be very lucrative. EzyLearn has recently created a new Microsoft Excel exercise, using the construction of a granny flat as a case study, which forms part of our online Excel Training Course.
It was created to help students understand how to use Excel for financial forecasting, but it’s also useful to those interested in constructing a granny flat on their property.
Costs that will be depreciated
In a recent post, we mentioned claiming depreciation on the property’s existing dwelling. If the existing dwelling on your property is rather old, it may not be able to be depreciated. Depreciation rates are determined by the ATO, while an quantity surveyor will be able to determine the value of your dwelling. The cost of the new granny flat will be depreciated over time. Keep in mind that individual elements of the granny flat, such as the floorings, can also be depreciated in addition to the capital structure.
Most expenses can be deducted
The ATO has a long list of expenses relating to rental properties that can be deducted. If you visit their website, you’ll find that most expenses relating to a rental property can be claimed as a tax deduction, depending on the type of rental property. If your granny flat is intended as a long term rental, as the granny flat in our case study is, then nearly all expenses, including the demolition of the old garage and other capital works can be deducted right away.
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How you treat these expenses and depreciable assets is covered in the granny flats case study of our Microsoft Excel Training Course. Visit our website for more information on our full suite of training courses.
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EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.
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[…] There are also tax advantages and deductions you wouldn’t ordinarily have by renting, something we discussed in a recent blog post about investing in a granny flat. […]