In profile: CBRE's commercial property tax specialist Neale Scott
Neale Scott says he would invest a spare $750,000 in past property syndicators/A-REITS in today's market, in particular those that invest in assets above $10 million.
Name: Neale Scott
Title: National Director - Capital Allowances
Company: CBRE
Location: Melbourne
How long have you been in the industry?
Eleven years
What’s happening in the area you specialise in?
It is now a requirement that all quantity surveyors providing depreciation advice must be a registered tax practitioner. This has been a positive change for the industry, prior to this coming in there were a number of companies providing this advice that may not have had the suitable skills, knowledge and insurance to be doing so.
Describe the most interesting property you have worked on:
There has been a few, most recently would have to the Woolworths - SCA portfolio transaction, it was large national portfolio with a tight deadline. All of which was achieved successfully.
What are the ingredients to being successful in your job?
It's an interesting role, you need a construction background with knowledge of construction costs, combined with knowledge of the property market and lastly a knowledge of the Australian tax system and the ins and outs of depreciation.
What aspects of your role do you enjoy the most?
It is amazing how many people/companies don't maximize their depreciation claim. Introducing a client to potential depreciation benefits, or reviewing their existing depreciation schedule then showing the potential uplift in their claim is the best part of my job. Recently I was able to increase a total depreciation claim by 25% of the purchase price (over $15 million ) on a CBD asset and this is not an isolated case.
What is the least understood aspect of depreciation from a commercial property investor’s point of view?
The total depreciation claim is the total of your claim for depreciating assets(formerly plant) and eligible building (capital works) deductions.
By far the least understood aspect of depreciation is the revaluation of the depreciating assets component. It is so common when an asset is acquired for purchasers to take the vendors written down values, where is reality (unless stated in the contract of sale) the purchaser can revalue these assets to reflect that amount paid for them (an apportionment of the purchase price).
The uplift on these assets is generally substantial. To put this in a non-property context, if you purchased a car, would your opening value for depreciation be purchase price or what the vendors written down value? Simple answer the purchase price. Whether it's carpet in a building or a car, they are both depreciating assets and their opening value should reflect the amount paid for the asset.
Where would invest a spare $750,000?
You can't go past property syndicators/REITS in today's market, in particular those that invest in assets above $10 million, with the cost of debt and the yields on offer for decent assets, not to mention the fantastic depreciation benefits.. It is too good an opportunity to miss out on.
Which football team do you support?
I am a keen Rugby Union supporter so the Melbourne Rebels. I also follow Collingwood, Melbourne Storm and Melbourne Victory in the other codes.
What’s your favourite app or techno gadget?
I never leave home without my iPad these days. It is just so convenient to have notes, camera and photos all in one place when inspecting a property. Being on the road quite bit means google maps gets a fair workout. I also have a two and half year old daughter who loves the iPad so the Wheels on the Bus app is a must have!
How do you use social media?
I think that LinkedIn is fantastic for establishing and building a network