Tax Depreciation Schedule: The Essential Tool for Property Investors

Key components of a Tax Depreciation Report

If you own an investment property and you’re not using a tax depreciation report — you could missing out on BIG potential tax savings.–And a professionally prepared depreciation schedule can dramatically boost your cash flow by maximising the tax deductions you’re entitled to. But what exactly does that look like?

Below is a sample of a tax depreciation report from Washington Brown and what’s included, how it works, and why it’s one of the smartest tools any savvy investor should have in their back pocket. Whether you’re new to the game or just want to squeeze every bit of value out of your portfolio, this guide will help you understand how depreciation schedules work — and how they can help your bottom line.

Let’s dive in and see how you can claim what’s rightfully yours!

Do you want to make the most out of your investment property? For many property investors, having a tax depreciation report can help unlock thousands of dollars in tax deductions each year. To simplify things, we’re breaking it down so you can see exactly how it works, what it includes, and why it’s an essential tool for maximising your property’s return.

You can view a Washington Brown sample depreciation schedule by clicking on the following link:

Depreciation Schedule Example

This example report indicates what you could expect to receive if you ordered a depreciation schedule for your property (to get a free quote, click here).

From this depreciation schedule sample, you can see that you will be provided with two methods of claiming depreciation on your investment property:

1. The diminishing value method of depreciation – fast tracks your deductions, so you claim more in the early years of ownership.
2. The prime cost method of depreciation – spreads your depreciation claims out more evenly over the life of the property.

The example depreciation schedule also breaks the construction of a building into two components:

1. The building allowance component of the building – which can be claimed at 2.5% per annum; and
2. The plant and equipment component of the building – which is claimed at varying rates.

From the depreciation schedule example, you can see the varying rates that the plant and equipment items – like blinds, air conditioning, etc. – are depreciated depending upon the asset’s effective life.

UPDATE: Deductions for plant and equipment items may only apply to commercial properties, brand new properties if you bought the property prior to May 9, 2017, or some other exceptions – Read about the Budget changes here.

If you’ve purchased property after May 9, 2017, and want to find out if you’ve been affected by these legislation changes – request a free review of your property by one of our tax depreciation specialists and find out how much you could expect to claim in deductions.

Once all the depreciation calculations on these items are complete, the tax depreciation schedule example clearly shows how much can be claimed using each method into a broken down year-end summary of amounts to be claimed based upon the financial year.

The Australian Taxation Office has identified Quantity Surveyors as the appropriate body to estimate costs where the costs are unknown.

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