In our previous article, we explained what a quantity surveyor is, the tasks that their role includes, what stages of the construction project their involved in, as well as how someone can become a quantity surveyor. In this article we’re going to go over the QS report.
What is actually a QS Report?
There are two main types of quantity surveyor reports: a cost report and a tax depreciation report. Let’s go over the former first:
Each council has various requirements that construction companies must meet in order for their Development Application (DA) to be approved. Most councils will require a detailed Cost Report if the estimated cost of a construction will exceed a limit specified by the council. This is typically somewhere between $500 and $3,000,000 – each council varies.
A cost report, which is provided by a registered quantity surveyor, verifies the construction costs a development project and thus allows the council to accurately calculate fees that the developer must pay. If you’re submitting a cost report as part of your DA, then you must meet the following requirements:
Below, we’ve included an example report — that has not been filled out — which is required by Waverly Council in NSW.
At PBAQS, we provided Cost Reports for $450 and offer a quick turnaround time. Contact us if you require a Cost Report today.
Tax Deduction Report
The Australian Taxation Office (ATO) will allow a developer to demand the decline in value of the building through the tax deduction. A property can be subject to tax deductions if you are using it for investment purposes.
A Quantity Surveyor can prepare tax depreciation schedules after a construction project has been completed. This is a crucial document for investors who want to claim tax benefits. Depending on the age and value of the building, the deducted amount varies between 2.5% and 4% of the capital works per annum.
The benefits of tax deductions can be significant. Investors can save up to $10,000 per year. Throughout Australia, when calculated accordingly, the amount of money that adds up through the tax deductions can go up into millions of dollars.
To be eligible for a tax deduction, an investor should hire a quantity surveyor or tax depreciation firm. They will perform an inspection of the real estate and will then conduct a depreciation schedule based on the onsite analysis of a quantity surveyor. The analysis needs to be undertaken by a registered company. Otherwise, the ATO will not accept calculations of the tax depreciation benefits for an investment property.
When a quantity surveyor creates their report, they will perform the following tasks:
When the Quantity Surveyor completes their report, it should be handed to an accountant, who will then calculate the tax benefits that the investor will receive that year.
After the initial report is made, the investor only needs to have it updated by the accountant. There is no need to make a new report each year. For example, if the investor renovates the bathroom, or paints the wall, the account will add those details to the original report.