Adding existing depreciation schedules, new builds and renovation projects for a property is relatively fast and painless. The better news, once added the schedules automatically allocate to future years to ensure nothing is missed year after year.
Step 1 - Add Depreciation
From the property select the depreciation tab, and then select the 'Add' button.
Step 2 - Choose Building & Improvements
Choose 'Building & Improvements' from the switcher to add all capital depreciation (ie. the building and structural improvements).
Step 3 - Add Depreciation
From a tax perspective, all capital depreciation uses the prime cost method, meaning a flat 2.5% depreciation rate is applied each year from the completion date.
Building & improvements fit into 3 categories:
Building & Improvements - Building at cost
The first step is to select 'building at cost' from the category dropdown, then complete the remaining fields as follows;
Category - Select 'building at cost' from the dropdown.
Amount - Enter the purchase price.
Completion Date - Enter the purchase date, or the date installed and ready for use.
Description - Usually the item name but whatever works for you.
Closing Balance - For existing schedules, confirm the closing balance is correct. If not, untick the 'Is this correct?' box and adjust the amount so the schedule can be correctly calculated going forward.
Upload Receipt - If it's a new purchase, you can upload a receipt. Otherwise, a depreciation schedule can be added directly to Spare Tank.
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Building & Improvements - Structural Improvements & Building Alterations
Structural improvements and building alterations are added in the same way as building improvements with one additional step, allocating a capital works group.
When adding structural improvements for the first time, you create a custom group (ie. kitchen or bathroom renovation) so that multiple capital costs can be allocated to the same group to easily track renovation projects.
To create a new group simply select the 'Add/Edit groups' button
Then enter the group name (for example, bathroom renovation), and the date the project was or will be completed (the effective date). From a tax perspective, this will be the date that depreciation starts for all transactions allocated to this group.
Select 'Add' to create the group which will display here with any other groups and can be edited at any time if the effective date changes.
From the depreciation pop-up its then just a matter of selecting the required group from the dropdown and completing the remaining fields.
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