Review may give investors some depreciation relief

John Freeman, a depreciation adviser and Wellington-based director for valuations and advisory services for Bayleys Valuations, says a policy review by the Inland Revenue Department and the Treasury broadly recommends a continuation of the current structure. 

Freeman says this would mean assets such as lifts, air-conditioning systems, plumbing, and electrical reticulation, would be treated differently to those in residential buildings - with depreciation claims continuing to be allowed.

He says an analysis of eight recent commercial and industrial property depreciation valuations undertaken by Bayleys showed that between 32% and 87% of the total depreciation allowances currently claimed from a combination of building and fit-out allowances were for the fit-out.

The IRD and Treasury document is inviting submissions on the review but Freeman expects the property industry and companies who own buildings to generally support the findings, subject to some further enhancements.