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Property inspections – are physical inspections necessary?

COVID-19 and tax depreciation reports

Where a physical inspection of premises is not performed, this increases the risk of deductions being missed or errors being made.

Property investors and businesses will often engage a specialist quantity surveyor to prepare a tax report on capital works and depreciation deductions available to them under the tax law in respect of their income-producing properties – for example, a rental property, office building or factory.

A thorough physical inspection of the property by a quantity surveyor plays a vital role in this process in order to, amongst other things:

  • identify all possible deductions available under the tax law;
  • provide accurate valuations of qualifying plant and building works;
  • provide supporting documentation of a taxpayer’s claims for depreciation and capital works deductions, which is prudent in the event of an ATO audit.

We have become aware that some quantity surveyors are promoting tax depreciation reports that do not include a physical inspection of the property due to COVID-19 precautions.

Usually the reports are provided with an offer to do an inspection at a later time when it is possible to do so.

However, in some cases, no offer of a site inspection is made at all. Where a physical inspection of premises is not performed, this increases the risk of deductions being missed or errors being made. This could result in costly adjustments if a taxpayer has to subsequently amend their tax return or is audited.

Read more about how Omnis Group’s Business Accountants work exclusively with the Australian real estate property sector at omnisrealestate.com.au or call us in Perth on 08 9380 3555.

Related reading

https://www.omnisgroup.com.au/business-accounting-taxation/ato-on-property-investments/

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Justin Flavel

Managing Director

Justin’s experience spans across 20 years in accounting, financial analysis and general business practice.

Although born and bred on the land, Justin’s interest was more in spreadsheets, ledgers, and finance which led him to attend university. In 1992, Justin graduated with a Bachelor of Business majoring in Accounting and Finance. As well as qualifying as a CPA member and becoming a Fellow of the Taxation Institute of Australia, he began gaining practical experience in small and mid-tier accounting practices.

During the late 90s, Justin decided to expand his horizons and travel through Europe. It was during this time that he seized the opportunity to expand his knowledge on the workings of large organisations by taking on roles in multinational corporations.

Today, Justin’s passion is in facilitating businesses to grow and evolve. His focus is on acting in the role of business mentor to help clients develop the full potential of their businesses. He joins clients on their unique journey, and provides the tools and knowledge they need along the way to make the right decisions.

Justin’s aim for his clients parallels his own philosophy and personal journey—focusing on his own career growth and business success while maintaining balance in his life with his wife and three daughters.

Omnis Group Managing Director - Justin Flavel