Thrive Property NT

Benefits of a Tax Depreciation Schedule for an Investor


Making the most of your investment

Chances are as a savvy property investor, you are all over the tax benefits of owning an investment property.

One item that is commonly overlooked (by as much as 70% of Australian property investors), is a tax depreciation schedule. They are one of the most beneficial yet neglected pieces of the property investment puzzle.

A tax depreciation schedule is often overlooked as it is a non-cash deduction. You may have simply missed it as you haven’t forked out the additional cash (such as repairs and maintenance) that it can be often overlooked.

The good news is, the ATO allows property investors to claim the depreciation of their investment property as a tax deduction.

What is a tax depreciation schedule?

A tax depreciation schedule sounds a lot fancier than it actually is.

Put simply, it is a report that details all the tax depreciation deductions you can claim on your investment property. This includes noting all the fixtures and fittings in the property so you can claim on these items.

What property tax depreciation deductions can I make?

As we know, as the years pass by, the structure and assets of your property age and suffer from wear and tear.

The tax depreciation deductions for property can be divided into two classes:

  1. Capital works

    Related to the fixed structure of the building such as roof, walls, doors and kitchen cupboards.

  2. Plant and Equipment

    Related to the removable fixtures and fittings of the building such as carpet, blinds, smoke alarms, fans and air conditioners.

Changes to the plant and equipment legislation in 2017

Changes to the tax depreciation schedule were made in 2017 whereby owners of second-hand properties who exchanged contracts after 9th May, 2017 cannot claim for previously used plant and equipment. Meaning, only new plant and equipment purchases can be claimed.

How do I go about obtaining a tax depreciation schedule?

A tax depreciation schedule is generally performed by a qualified surveyor. If you are interested in obtaining a schedule, we can assist with this on your behalf.

How do I claim the deductions each year?

Once you have your tax depreciation schedule on hand, simply hand it over to your accountant to do the sums at the end of the financial year.

With June 30 getting closer and closer, now is the time to consider putting this task on your to-do list.

Planning a renovation?

If you are planning on renovating your investment property, we advise getting a tax depreciation schedule prepared. You may be able to claim substantial deductions on any major renovation works including new plant and equipment and structural elements.

With tax time creeping up, get in contact with the team if you are interested in arranging your investment property tax depreciation schedule to maximise their year’s return.