Tax Depreciation
Everything You Need to Know
What is Tax Depreciation?
As a property investor, you can claim deductions on the natural decline in value of your investment property and its assets over time. This process is called tax depreciation, and it helps reduce your taxable income - just like you would claim expenses on work-related tools or equipment.
Who Can
Claim?
Tax depreciation can be claimed on both residential investment properties and commercial buildings. Whether your property is new or old, there are usually depreciation benefits you can access.
Why Should I Claim?
Claiming tax depreciation lowers your taxable income, helping you reduce how much tax you have to pay. You could be entitled to claim thousands of dollars in deductions annually.
What Can I
Claim?
Deductions are divided into two main categories:
-
Division 43: Capital works deductions (covering the building structure)
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Division 40: Plant and equipment depreciation (covering fixtures and fittings)
Who can Benefit from a Tax Depreciation Schedule?
Accountants / Tax Agents
Ensure your clients unlock the highest possible tax savings with fully compliant depreciation reports that meet all ATO requirements.
Mortgage
Brokers
Depreciation boosts your clients’ cash flow, making it easier for them to reinvest and expand their property portfolio more quickly.
Property
Developers
Our Depreciation Reports highlight the long-term tax savings available to buyers, helping demonstrate the added value and cost-effectiveness of your projects.
Real Estate Professionals
Complimentary upfront estimates give your clients insight into potential tax savings before making a purchase.
When should I request a Tax Depreciation Schedule?
It’s ideal to organise a depreciation schedule once your investment property is officially listed for rent. This ensures valuations reflect the property’s true condition and meet the criteria for claiming depreciation.
If you haven’t claimed depreciation yet, don’t worry you can generally back-claim missed deductions for at least two previous financial years. Plus, the fee for your depreciation schedule is also tax-deductible in the year you pay for it, giving you even more tax benefits.
Significant renovations like knocking down and rebuilding sections of the property usually require a brand new depreciation schedule. For smaller updates, such as new kitchens, bathrooms, or appliances, a simple update to your existing schedule will do.
Before starting any renovations, it’s a smart move to check in with the Tax Depreciation Wizard. They can provide tailored advice to help you get the most out of your depreciation claims.
What type of Properties are Eligible?
Residential
If you own a residential property you are eligible for claim of depreciation regardless of how old the property is. All capital flows such as; renovations, extensions, granny flats and other home extensions can be depreciated whether they were built by you or prior to your investment. TDW has implemented thousands of tax depreciation schedules for investors in order to guarantee your deductions are amplified while ATO approved.
Who Can
Claim?
Why Should I Claim?
Commercial
Increase your cash flow on commercial property. Commercial tax depreciation has significant benefits for both the landlord and their tenant(s). Thousands of dollars can be saved with a commercial depreciation schedule. Consider gradual wear and tear of a building and its fixtures/fittings over time.
