BMT Tax Depreciation Estimate3-7 Porters Lane

ST IVES, NSW 2075

24 April, 2012

Property SourceSuite 703 10 Help StreetCHATSWOOD, NSW 2067

3-7 Porters Lane, ST IVES, NSW 2075 - 193757.2

Dear Carl,

Please find attached the BMT Tax Depreciation Estimates for the above property detailing thedepreciation and associated tax allowances that may be available to the owner under theIncome Tax Assessment Act 1997 (ITAA97).

This document is intended to provide a guide to the potential depreciation and buildingallowances available from the purchase of the above residential property, facilitating theestimation of the after tax return on the investment over the first 10 full years of ownership.

1.0 Information

The following information was used in the preparation of the schedules:

Ø Written and verbal information provided by Property Source.

2.0 Depreciation Potential – Plant and Capital Allowance

The purchaser of the property, intending to use it for income producing purposes, is entitled todepreciation including:

Ø Division 40, Depreciation of Plant and Equipment; and

Ø Division 43, Capital Works Allowance (2.5 % pa).

The depreciation of plant and equipment items is based on the diminishing value effective life ratesas published by the commissioner of taxation (TR2009/4).

In the scenario where plant and equipment items are not sold at an agreed value these items willbe depreciated on the basis of a just attribution of the total expenditure (42-65 ITAA97).

3.0 Capital Work Allowance

The special building write off allowance is based on the industry specific eligible dates. If theproperty qualifies for the special building write off, the applicable depreciation rate will be used.Where properties do not qualify for the special building write off allowance, no capital worksallowance will be used.

BMT Tax DepreciationQUANTITY SURVEYORS

Level 20, Tower 2, Darling Park201 Sussex St, Sydney NSW 2000PO Box N314Grosvenor Place NSW 1220t 02 9241 6477f 02 9241 6499

e info@bmtqs.com.auw www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions

The allowance for capital works will be based on the historical cost of construction less non-depreciable items.

4.0 Estimate Calculation

This report is based on a just attribution of the total expenditure to estimate the allowances forplant. The estimates provided are based on the sale price as indicated, as the final purchase priceat this time is not known.

This estimate has been provided for the purpose of informing the investor of the depreciationpotential. Different depreciation returns are available and are influenced by the purchase price ofthe property.

Please note that the first year calculations are based on ownership over a full financial year.

5.0 Disclaimer

This report has been based on very preliminary documentation, and the figures provided should betreated as a guide only.

As documentation improves, BMT Tax Depreciation will be able to provide more accurateestimates of depreciation.

6.0 Conclusion

As can be extracted from the attached tables, the units will obtain maximum depreciationpotential within the first 5 years of ownership.

BMT Tax Depreciation would be pleased to provide a complete detailed tax depreciation reporton any of the units in the above property upon request.

Our results suggest employing a specialist to maximise the various tax allowances has a significanteffect on improving the after tax return.

Should you or the purchaser wish to discuss the contents of this report in more detail, please do nothesitate to contact Bradley Beer of this office.

Yours Sincerely,

BMT Tax Depreciation Pty LtdQuantity Surveyors

BMT Tax DepreciationQUANTITY SURVEYORS

Maximising Property Tax Depreciation Deductions

Appendix One

BMT Tax Depreciation Estimate3-7 Porters Lane

ST IVES, NSW 2075

BMT Tax DepreciationQUANTITY SURVEYORS

Maximising Property Tax Depreciation Deductions

BMT Tax Depreciation Estimates &BMT Tax Depreciation Reports

BMT Tax Depreciation EstimatesBMT Tax Depreciation Estimates ensure that investors are easily able to determine their after-tax cash position if they were to purchase a particular property. Presenting a potential investor with a BMT Tax Depreciation estimate assists the buyer, results in a value added service and often helps with early sales. The report will show the minimum and maximum range of depreciation along with the expected depreciable ‘plant and equipment articles’ within the building and the building write off allowance.

BMT Tax Depreciation ReportsBMT Tax Depreciation Reports are used to claim depreciation deductions when completing your tax return. The report

will provide the basis for maximising claims covering both plant and equipment depreciation and building write off. Many investment property owners remain unaware of the benefits that tax

depreciation provides. There are usually thousands of dollars to be claimed in depreciation deductions on any investment property. BMT Tax Depreciation specialise in maximising

the total depreciation available from a given property under current legislation.

Marketing/Real Estate Agent engages BMT TaxDepreciation to complete a Tax Depreciation Estimate

for a specific development, prior to, or during marketing phase

How the Documents Work

Investor purchases the property

After settlement the purchaser engages BMT TaxDepreciation to complete a Tax Depreciation Report.

This document is offered by BMT Tax Depreciation at adiscounted rate as BMT have knowledge of the property

BMT Tax Depreciation Report contents are used in the purchaser’s tax return preparation

Property Tax Depreciation and Construction Cost Consultants

Estimate of Depreciation ClaimableTypical 1 Bedroom Apartment

3-7 Porters Lane, ST IVES, NSW 2075Purchase Price

$485,000

MaximumYear Plant &

EquipmentDivision 43 Total

1 6,755 5,251 12,0062 3,786 5,251 9,0373 2,801 5,251 8,0524 2,301 5,251 7,5525 1,693 5,251 6,9446 1,466 5,251 6,7177 1,225 5,251 6,4768 849 5,251 6,1009 773 5,251 6,024

10 509 5,251 5,76011 + 1,823 152,304 154,127

Total $23,981 $204,814 $228,795

Comparison Yr 1-10 (Min & Max)

$0

$1,300

$2,600

$3,900

$5,200

$6,500

$7,800

$9,100

$10,400

$11,700

$13,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

MinimumYear Plant &

EquipmentDivision 43 Total

1 5,287 4,109 9,3962 2,963 4,109 7,0723 2,192 4,109 6,3014 1,801 4,109 5,9105 1,325 4,109 5,4346 1,148 4,109 5,2577 959 4,109 5,0688 664 4,109 4,7739 605 4,109 4,714

10 399 4,109 4,50811 + 1,427 119,194 120,621

Total $18,770 $160,284 $179,054

Cumulative Yr 1-10 (Min & Max)

$0

$7,500

$15,000

$22,500

$30,000

$37,500

$45,000

$52,500

$60,000

$67,500

$75,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Bradley Beer at BMT Tax Depreciation on 02 9241 6477

BMT Tax DepreciationQUANTITY SURVEYORS

Level 20, Tower 2, Darling Park201 Sussex St, Sydney NSW 2000PO Box N314Grosvenor Place NSW 1220t 02 9241 6477f 02 9241 6499

e info@bmtqs.com.auw www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions

Estimate of Depreciation ClaimableTypical 1 Bedroom + Study Apartment

3-7 Porters Lane, ST IVES, NSW 2075Purchase Price

$495,000

MaximumYear Plant &

EquipmentDivision 43 Total

1 6,869 5,421 12,2902 3,840 5,421 9,2613 2,841 5,421 8,2624 2,330 5,421 7,7515 1,715 5,421 7,1366 1,484 5,421 6,9057 1,237 5,421 6,6588 859 5,421 6,2809 784 5,421 6,205

10 518 5,421 5,93911 + 1,868 157,204 159,072

Total $24,345 $211,414 $235,759

Comparison Yr 1-10 (Min & Max)

$0

$1,300

$2,600

$3,900

$5,200

$6,500

$7,800

$9,100

$10,400

$11,700

$13,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

MinimumYear Plant &

EquipmentDivision 43 Total

1 5,376 4,243 9,6192 3,005 4,243 7,2483 2,223 4,243 6,4664 1,823 4,243 6,0665 1,342 4,243 5,5856 1,161 4,243 5,4047 968 4,243 5,2118 672 4,243 4,9159 614 4,243 4,857

10 405 4,243 4,64811 + 1,462 123,029 124,491

Total $19,051 $165,459 $184,510

Cumulative Yr 1-10 (Min & Max)

$0

$7,700

$15,400

$23,100

$30,800

$38,500

$46,200

$53,900

$61,600

$69,300

$77,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Bradley Beer at BMT Tax Depreciation on 02 9241 6477

BMT Tax DepreciationQUANTITY SURVEYORS

Level 20, Tower 2, Darling Park201 Sussex St, Sydney NSW 2000PO Box N314Grosvenor Place NSW 1220t 02 9241 6477f 02 9241 6499

e info@bmtqs.com.auw www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions

Estimate of Depreciation ClaimableTypical 2 Bedroom Apartment

3-7 Porters Lane, ST IVES, NSW 2075Purchase Price

$625,000

MaximumYear Plant &

EquipmentDivision 43 Total

1 7,629 7,927 15,5562 5,308 7,927 13,2353 3,855 7,927 11,7824 3,045 7,927 10,9725 2,230 7,927 10,1576 1,862 7,927 9,7897 1,520 7,927 9,4478 1,076 7,927 9,0039 777 7,927 8,704

10 576 7,927 8,50311 + 2,987 229,863 232,850

Total $30,865 $309,133 $339,998

Comparison Yr 1-10 (Min & Max)

$0

$1,600

$3,200

$4,800

$6,400

$8,000

$9,600

$11,200

$12,800

$14,400

$16,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

MinimumYear Plant &

EquipmentDivision 43 Total

1 5,971 6,204 12,1752 4,154 6,204 10,3583 3,017 6,204 9,2214 2,383 6,204 8,5875 1,745 6,204 7,9496 1,457 6,204 7,6617 1,190 6,204 7,3948 842 6,204 7,0469 608 6,204 6,812

10 451 6,204 6,65511 + 2,337 179,893 182,230

Total $24,155 $241,933 $266,088

Cumulative Yr 1-10 (Min & Max)

$0

$10,800

$21,600

$32,400

$43,200

$54,000

$64,800

$75,600

$86,400

$97,200

$108,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Bradley Beer at BMT Tax Depreciation on 02 9241 6477

BMT Tax DepreciationQUANTITY SURVEYORS

Level 20, Tower 2, Darling Park201 Sussex St, Sydney NSW 2000PO Box N314Grosvenor Place NSW 1220t 02 9241 6477f 02 9241 6499

e info@bmtqs.com.auw www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions

Estimate of Depreciation ClaimableTypical 2 Bedroom + Study Apartment

3-7 Porters Lane, ST IVES, NSW 2075Purchase Price

$635,000

MaximumYear Plant &

EquipmentDivision 43 Total

1 8,080 8,101 16,1812 5,640 8,101 13,7413 4,094 8,101 12,1954 3,221 8,101 11,3225 2,360 8,101 10,4616 1,962 8,101 10,0637 1,595 8,101 9,6968 1,135 8,101 9,2369 826 8,101 8,927

10 619 8,101 8,72011 + 3,252 234,899 238,151

Total $32,784 $315,909 $348,693

Comparison Yr 1-10 (Min & Max)

$0

$1,700

$3,400

$5,100

$6,800

$8,500

$10,200

$11,900

$13,600

$15,300

$17,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

MinimumYear Plant &

EquipmentDivision 43 Total

1 6,323 6,340 12,6632 4,414 6,340 10,7543 3,204 6,340 9,5444 2,521 6,340 8,8615 1,847 6,340 8,1876 1,535 6,340 7,8757 1,248 6,340 7,5888 888 6,340 7,2289 646 6,340 6,986

10 484 6,340 6,82411 + 2,545 183,834 186,379

Total $25,655 $247,234 $272,889

Cumulative Yr 1-10 (Min & Max)

$0

$11,100

$22,200

$33,300

$44,400

$55,500

$66,600

$77,700

$88,800

$99,900

$111,000

1 2 3 4 5 6 7 8 9 10Years

Maximum                         Minimum

* assumes settlement on 1 July in any given year.

This is an estimate only and should not be applied or acted upon. Depreciation of plant is based on the Diminishing Valuemethod of depreciation applying Low-Value Pooling. The Division 43 Write Off Allowance is calculated using 2.5% or 4%depending on the property type and date of construction. This estimate is based upon legislation in force at the date ofreport production.

This Estimate Cannot Be Used For Taxation Purposes

To discuss the contents of this report please contact Bradley Beer at BMT Tax Depreciation on 02 9241 6477

BMT Tax DepreciationQUANTITY SURVEYORS

Level 20, Tower 2, Darling Park201 Sussex St, Sydney NSW 2000PO Box N314Grosvenor Place NSW 1220t 02 9241 6477f 02 9241 6499

e info@bmtqs.com.auw www.bmtqs.com.au

Australia Wide Service ABN 44 115 282 392

Maximising Property Tax Depreciation Deductions