Doing a final check over my IR3Rs before I send it off. Dumb question admittedly and I know it's very late in the piece.

In terms of rentals, if a kitchen has an integrated Bosch cooktop and oven (built in to the Kitchen cabinetry). I'm picking these are essentially considered part of the fabric of the building and therefore can not be depreciated?

cognition - 2021-07-02 12:46:00

For insurance, built-ins are part of your House insurance, free standing appliances are part of your contents insurance. So yes sounds like they're classed as 'part of the building'.

Edited by lyl_guy at 1:04 pm, Fri 2 Jul

lyl_guy - 2021-07-02 13:04:00

In my view after reading the following, a stove top (hob) is part of the building. See https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/p
dfs/interpretation-statements/is1001.pdf

peric - 2021-07-02 19:21:00

So when the tenant breaks them the whole cost can be claimed as a repair? Probably not.

pcle - 2021-07-02 20:27:00

From peric's document...

is1001 wrote:

4. The Commissioner concludes that the approach to determine whether a
particular item is part of or separate from the building, is to apply the
following three-step test:

Step 1: Determine whether the item is in some way attached or connected to the
building. If the item is completely unattached, then it will not form a part of the
building. An item will not be considered attached for these purposes, if its only
means of attachment is being plugged or wired into an electrical outlet (such as a
freestanding oven), or attached to a water or gas outlet. If the item is attached to
the building, go to step 2.

Step 2: Determine whether the item is an integral part of the residential rental
property such that a residential rental property would be considered incomplete or
unable to function without the item. If the item is an integral part of the
residential rental property, then the item will be a part of the building. If the item
is not an integral part of the residential rental property, go to step 3.

Step 3: Determine whether the item is built-in or attached or connected to the
building in such a way that it is part of the “fabric” of the building. Consider
factors such as the nature and degree of attachment, the difficulty involved in the
item’s removal, and whether there would be any significant damage to the item or
the building if the item were removed. If the item is part of the fabric of the
building, then it is part of the building for depreciation purposes.

I think that it would probably qualify as part of the building.

Incidentally, this also raises an interesting point. In that document about heating systems (CTRL-F for heat pump)

is1001 wrote:

A residential rental property would not generally be considered incomplete
without a heating or air conditioning system and residential rental properties are routinely let without such systems.

This is of course no longe really true, with HHS you can't generally speaking have a residential rental without a heating system of some description, most likely a heat pump. I would question if heatpumps which might previously have been separately depreciable are now part of the building.

Edit to add, this document specifically about HHS:

https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/p
dfs/questions-we-ve-been-asked/2020/qb-20-01.pdf

" The Commissioner considers that heat pumps and the other forms of heating sufficient to meet the 2019 regulations are not yet a required feature of all residential rental buildings. Accordingly, at present, a building may be considered complete without these particular heating systems. As such, they are not integral to the building under step 2. "

I don't see how they come to that conclusion myself, but OK.

Edited by bitsy_boffin at 9:48 pm, Fri 2 Jul

bitsy_boffin - 2021-07-02 21:37:00

Check if the appliances meet last year's temporary $5000 low value asset threshold and rules to be expensed. Are there separate invoices for them?

artemis - 2021-07-03 06:32:00

Treat them as a stand alone asset and depreciate. While they are built in to the kitchen, they are separate from the house as a building. Can easily be removed and put into a new kitchen. A house is also considered to last more than 50 years... a stove won't

tom-tk - 2021-07-03 19:19:00

I order to get the oven and or cook top out do you have to dismantle part of the joinery.. e.g. unscrew a face plate ?? or do they just sit on a cavity in the joinery e.g. just a matter of sliding them out and disconnect the power..

onl_148 - 2021-07-07 15:53:00