The Australian Institute of Quantity Surveyors (AIQS) has warned that property investors that they could be financially penalised by not using a registered member of the AIQS to conduct a depreciation report for their investment property.
According to AIQS General Manager Terry Saunders, complaints made to the AIQS by unhappy property owners, generally refer to non AIQS members.
“These are people whom the AIQS has little control over while the very few complaints involving AIQS members have been amicably settled after review by the AIQS,” Mr Saunders said.
“The AIQS enjoys a close working relationship with the ATO and has worked with the ATO for some 5 years on the review and revision of the requirements for investment/rental property depreciation reporting. Our Tax Depreciation Committee remains in close contact with the ATO and continues to participate actively in the ATO’s consultation process.
“Property owners would be very wise to select AIQS members to undertake depreciation work for them,” he said.
According to DEPPRO Asia Pacific Managing Director and Associate Member of the Australian Institute of Quantity Surveyors, Paul Bennion, depreciation, like other areas of finance and tax, is complicated and so it is essential that property investors get the right advice.
“Unfortunately, there are many businesses in the industry that did not have the qualifications and experience to ensure property investors received quality advice,” he said.
Mr Bennion, who as part of a task force of industry professionals, was consulted by the Australian Tax Office when developing new legislation in the area of residential property depreciation, said there were a number of companies providing depreciation schedules that did not have the experienced and qualified personnel necessary to ensure they were giving the right advice.
“Over the past two years, the ATO has spent a lot of time removing ambiguities from the legislation dealing with depreciation on residential properties.
“As a part of this process, the ATO consulted with professional bodies and ensured they were kept informed about of changes and requirements, for which they should be complemented.
“AIQS has played a critical role in conveying the ATO’s message to its Quantity Surveying members.
“For depreciation professionals, having the appropriate training and qualifications and being a member of organisations such as the AIQS is critical in ensuring you can provide the best advice for your clients.”
“Without it, it is impossible to keep in touch and up-to-date with legislative requirements. Companies whose representatives are not members are also not bound by any Code of Professional Conduct.”
Mr Bennion said providing a depreciation schedule was not as simple as ticking the boxes.
“As a member of AIQS, DEPPRO offers a total professional service from the time the job is received, to booking in and carrying out a detailed inspection, assessing and analysing construction costs, quality control and delivery of the report.
“This provides complete peace of mind for our clients.”
Mr Bennion said however there were a number of companies in the marketplace that had been created to cash in on the tail end of the property boom.
“Some of these companies promote themselves as ‘leaders in the industry’ or ‘tax depreciation professionals’ when in reality, their representatives do not have any professional qualifications in quantity surveying, degree or expertise in tax depreciation,” Mr Bennion said.
Mr Bennion said property investors should be weary of companies that were facades, with salesmen or women touting catch phrases and a more dubious approach to providing advice in relation to tax depreciation entitlements.
“In many cases these companies probably do not even complete the depreciation schedules but out-source the work to others who do not even see the property and simply apply a one-size-fits-all approach to preparing it.”
Mr Bennion advised investors to research the representatives actually preparing their depreciation schedule and to ensure the company is suitably qualified and experienced before hiring the company