Please find the link to the recording HERE

This recording will expire on 17th of March 2026.

CPD points: 1

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To view the webinar slides, please click HERE

Message from the presenter Mark Kilroy:

The key takeaway is to think about the full property life cycle and how you, as a Quantity Surveyor, can add value beyond just acquisition and construction depreciation reports.

Key Opportunities for Quantity Surveyors in Tax Depreciation:

✅ Ongoing Depreciation Management – Don’t just prepare a report once; think about how you can support clients throughout ownership.
✅ Helping Clients Maximise Deductions – Many businesses and investors miss valuable claims simply because they don’t have the right advice.

Please see below for Mark's answers to questions that he didn't get time to answer during the webinar:

1) 'In residential tax depreciation, I do not use the purchase price at all, calculate the build cost based on drawings/documents and adjust it to the Construction Cost Index. It seems in commercial tax depreciation you mentioned purchase price apportionment is important?'

In residential tax depreciation, the purchase price is not directly used to determine depreciation, as deductions are based on the original construction cost. However, in both residential and commercial reports, we apply a fair apportionment of the purchase price, but this only affects Division 40 (Plant & Equipment). Division 43 (Capital Works) is always based on actual construction costs.

In commercial properties, purchase price apportionment is particularly important as businesses often acquire properties with significant plant and equipment, which needs to be fairly allocated for depreciation purposes.

This ensures that all eligible assets are correctly valued and depreciated, maximising deductions for the property owner.

2) 'What about the cost of demolishing? (Follow-up question to: How is demolition treated from a depreciation perspective?)'

Demolition costs are not included in the purchase price apportionment for depreciation purposes. If a Division 43 structure is removed, any undeducted value can be written off. If Division 40 assets are removed, a balancing adjustment applies.

If the demolition is part of a larger redevelopment, the cost may be capitalised into the new build rather than immediately deducted. If demolition is a tenant’s responsibility under a make-good clause, then the tenant usually bears the cost and may be able to claim it as an expense.

3) 'Is there a formula to recalculate historical building costs for older constructions?'

Yes, historical building costs are typically adjusted using the Building Cost Index (BCI):

Recalculated Cost = Original Cost × (Current BCI ÷ Historical BCI)

For example, if a building was constructed in 1990 with a cost of $500,000, and the BCI has tripled since then, the indexed cost would be $1,500,000.

If no historical cost records are available, Quantity Surveyors typically:

Refer to industry cost guides (e.g., Rawlinsons, Cordell).

Index past costs based on market trends.

Compare to similar properties of the same era.

These indices are typically published on a half-yearly basis by Rawlinsons, Cordell, and other industry sources. While indexing provides a reasonable estimate, additional factors such as renovations, location-specific pricing, and material variations should also be considered.

The views and opinions expressed in this presentation are those of the presenter(s) and do not necessarily reflect the official policy or position of AIQS.