Property depreciation is one of the most valuable tax advantages available to Australian property investors. It allows you to claim the natural wear and tear of your investment property as a tax deduction, improving cash flow each financial year. If you are not claiming it, you are likely missing out on legitimate savings.
Building write-off vs plant and equipment: what is the difference?
Property depreciation falls into two main categories.
The first is capital works, also known as building write-off. This covers the structural components of your property, including walls, floors, windows and the roof. Properties built after 1987 are generally eligible for these deductions.
The second category is plant and equipment. This includes items within the property that can be removed or replaced, such as carpets, appliances, blinds, hot water systems and air conditioning units. These items decline in value over time, and the ATO allows you to claim that reduction.
Understanding both categories helps ensure you are claiming the full benefit of property depreciation.
How to get a property depreciation schedule
To access the full benefits of property depreciation, you will need a professionally prepared depreciation schedule.
Engage a qualified quantity surveyor, as they are one of the few professionals recognised by the ATO to calculate depreciation.
They will inspect your property, assess eligible items and prepare a detailed schedule outlining yearly deductions for up to 40 years.
Provide this schedule to your accountant to apply the deductions at tax time.
A well-prepared schedule often pays for itself in the first year, making it a practical step for investors looking to maximise returns.
If you are looking to grow your portfolio or ensure your current investment is performing as it should, our team can help you make informed property decisions. Contact AMKAR Real Estate to discuss your next move.
This article provides general information only and does not constitute legal, financial or professional advice. The information in this article was accurate to the best of our knowledge at the time of writing; however, laws, regulations and market conditions may change. Readers should consider their own circumstances and undertake their own due diligence before making any decisions, and seek appropriate professional advice where necessary.