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Staying Under the ATO’s Radar

Compiling the report properly

A depreciation schedule on your investment property can generate significant tax savings – as long as it has been complied correctly.

In my experience there are three main areas the Australian Tax Office tends to target come tax time.

1. Repairs and maintenance

One of them is whether you’ve claimed repairs and maintenance correctly. Now this can be tricky…

2. Income producing

Your property must also be income producing in order to claim depreciation.

For instance, if you make a repair while living in the property, then move out 2 months later, you can’t claim it.


3. Building allowance

The third area of concern is in relation to the building allowance.

The building allowance refers to the wear and tear on the actual building – things like bricks and concrete. You have to make sure they’re being claimed in the right Depreciation Calculatorcategory and not alongside items like carpets and blinds, which are considered plant and equipment.

The building depreciation allowance must also be claimed on construction costs – NOT the purchase price of your property. A mistake I see time and time again.

That’s where we can help! The Australian Tax Office (ATO) recognises Quantity Surveyors as the right people to estimate these costs. NOT valuers nor real estate agents.

Follow these rules

So there you have it. Make sure you follow these simple rules to stay under the ATO’s radar;

If you need a depreciation schedule for your investment property – get a quote here or work out how much you can save using our free calculator.

About Tyron Hyde

Tyron Hyde is a director of quantity surveying firm Washington Brown. He is regarded as one of the industry's leading experts in property tax depreciation, is regularly quoted in the media & asked to speak at conferences. -