Chattels Valuation Reminder
For long-term rental properties, having your chattels (furniture, appliances, and other fixtures) professionally valued is important. Accurate valuations not only ensure you are properly covered by insurance in the event of damage or loss, but also help with GST compliance, as chattels form part of the property’s taxable assets. Regular valuations allow you to track wear and tear, plan for replacements, and protect your investment over time. We recommend reviewing and updating your chattels valuations periodically to safeguard both your property and your financial interests.
1. Tax advantages
A chattels valuation separates removable assets (such as appliances, carpets, curtains, and heat pumps) from the building. These items can often be depreciated for tax purposes, potentially reducing taxable income and improving cash flow.
2. More accurate asset allocation
It provides a clear breakdown of the property’s purchase price between the building, land, and chattels. This helps ensure the financial records are accurate for accounting and tax reporting.
3. Maximising deductions for investors
By identifying and valuing all eligible chattels, investors may increase the amount they can depreciate, which can mean greater deductions over time.
4. Support for accountants and IRD compliance
A professional valuation provides documentation that accountants and the IRD can rely on, reducing the risk of disputes or adjustments later.
5. Useful during property transactions
Having a chattels valuation at purchase helps buyers and sellers agree on fair values for the included items, avoiding confusion or inflated allocations.
Examples of items typically included as chattels:
Carpets
Curtains and blinds
Whiteware (fridge, dishwasher, washing machine)
Heat pumps
Furniture (if sold furnished)
Some light fittings