2012 Articles and updates

Keeping up to Date

2012 Articles and updates

Commercial depreciation sky high

Despite all of the recent changes to depreciation the benefits for commercial property owners are still fantastic. I have covered this in recent articles but thought I should let the figures do the talking. I have decided to highlight a recent example for a property we have completed an apportionment on.

PROPERTY TYPE: 92 room hostel located in Auckland. Configuration is 56 studio rooms and 36 lofted rooms in addition to a managers’ flat and office. The complex is built around a central open courtyard, with all rooms enjoying communal use of a kitchen, dining area, TV lounge and laundry. The building originally comprised an office/warehouse structure which was redeveloped to its current use in 2002.

PURCHASE PRICE: $5,156,862 including $100,000 of Plant and Equipment

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The main features of depreciation AND how to deal with insurance proceeds

I have been fairly active in recent months with talking to investors and I have been getting several questions repeated so I thought perhaps it was time to clear up a few points.

To do this I have used the IRD publications on depreciation (IR260 & IR264) and have used extracts from these publication as IRD do explain it clearly.

Most importantly I have covered IRD’s position in relation to Insurance proceeds. This is obviously relevant to those investors with property in Christchurch.

IRD publication extracts as follows;

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