Try Washington Brown's proprietary
Property Depreciation Calculator
This is the first calculator to draw on real properties to determine an accurate estimate. It allows you to work out the likely tax depreciation deduction on your investment property.
What does this Tax Depreciation Calculator do?
The Tax Depreciation Calculator aims to provide you - the investor - with an estimate of the likely tax depreciation deductions available on certain properties.
How does it work?
Our calculator searches for similar properties across our extensive database and creates an estimate based on these actual properties.
Why is this information useful?
Most investors don’t think about depreciation until after they have purchased a property. Having this information up front helps you make a more informed decision as to which property to buy.
What is so special about this Tax Depreciation Calculator?
Washington Brown’s proprietary Tax Depreciation Calculator is the first calculator to draw on real properties to determine an accurate estimate. It allows you to work out the likely tax depreciation deduction on your next investment property. By factoring this amount into your decision-making, the Tax Depreciation Calculator provides the “missing link” in the property investment equation.
How accurate is this Tax Depreciation Calculator?
As all properties are different, it is difficult to obtain a result that is 100% accurate. However, we believe this calculator is as good as it gets based on current available data on thousands of properties we’ve inspected. As our database expands, so will the amount of properties we have access to. All results in this calculator have been rounded to the nearest thousand.
What types of properties are excluded from the Tax Depreciation Calculator?
The Tax Depreciation Calculator does not include properties that are renovated or ones that are fully furnished as this would lead to an inaccurate result.
How much does it cost to use the Tax Depreciation Calculator?
Our calculator is completely free to use.
This is exactly what I need on my website, how can I organise a link to my site?
Can I use this estimate within my tax return?
No, In order to satisfy the Australian Taxation Office (ATO) and the Australian Institute of Quantity Surveyors guidelines, the property MUST be evaluated by a qualified quantity surveyor. A complete breakdown of plant and equipment must be provided and the capital allowance must be assessed for your individual property.
What does it mean if I press the “Calculate” button and nothing happens?
This means that no properties were found that were similar to your criteria. Contact us for a verbal estimate or alternatively, we can prepare a report on your actual property.
The numbers don’t seem to be correct, what do I do?
Whilst we have tried our best to ensure this data is as accurate as possible, there may be occasional discrepancies when cross-referencing our extensive database. Please send an email to info('at')washingtonbrown.com.au and we will address your issue as soon as possible.
How have you defined each property category?
Properties have been defined according to the following broad definitions:
- House: Any freestanding residential property
- Unit: A residential strata titled unit in a building with no lift
- Highrise: A residential strata titled unit in a building with a lift
Commercial suite: A strata titled office within a commercial complex of many suites
- Industrial suite: A strata titled industrial unit within a complex of many industrial units
- Industrial building: A wholly owned freestanding industrial building on one title
- Commercial building: A wholly owned freestanding commercial building on one title
- Townhouse: A strata titled residential building up to two levels above ground, the property may be adjoining other units within the complex.
What does the “years” column represent?
Each year represents a full financial year. This calculator provides an estimate of the likely allowances on the basis you are going to settle on that property today. For example, Year 1 represents the amount you can claim over the next 365 days if you purchased a similar property to data you have already entered.
What do the terms Diminishing Value method and Prime Cost method mean?
Both terms refer to the way in which Plant and Equipment is depreciated in accordance with the Australian Taxation Office (ATO) guidelines. The Diminishing Value method accelerates the allowances in the earlier years, where as the Prime Cost method evenly spreads the allowances out.
How do I know the age of the property?
In this field we need to know the year construction commenced for your property. If you do not have this information, contact the relevant local council for assistance.
Still have questions? Talk to Washington Brown to help solve your Property Depreciation queries.
What Is a Depreciation Calculator?
A depreciation calculator is merely an accounting tool for calculating the declining value of the asset vs. its original value and the sum of the depreciation. However, the Washington Brown depreciation calculator takes into account various relevant factors, which in return allows for a more accurate estimate.
Of course, we would advise you to get in touch with our quantity surveyors for a detailed depreciation report or depreciation schedule. A highly qualified professional will know how to integrate every important feature and acquire the maximum amount that decreases your taxable income.
Get a free depreciation quote from Washington Brown today!
Let us explain the features of the Washington Brown depreciation calculator so that it’s easier for you to input the right information. Moreover, our depreciation calculator works on already gathered information, meaning when you input the data, we search the properties in our extensive database to find the ones similar to yours. Once we do that, you’re getting real estimates, which can be valuable to you in more ways than one.
Short Step-by-Step Instruction Manual
- You need to enter the purchase price of the property in AUD (always input the amount specified in the Contract of sale of real estate — it’s usually stated in the Particulars of sale section of the contract)
- The purchase date of the property (this is necessary information because of the new ATO depreciation guidelines)
- The year in which the building was built (relevant for calculating the depreciation and if you are actually entitled to it)
- Property type (click on the info button for further details or check the Contract of sale of real estate)
- Standard of finish (click on the info button for additional information)
The only thing you have to do now is click calculate, and wait for the results. The process only takes a couple of seconds after which you get the estimate depreciation claims over the first 10 years of your owner.
What are depreciating assets, according to ATO guidelines?
According to the Australian Taxation Office (ATO), a depreciating asset
"… is one that has a limited effective life and can reasonably be expected to decline in value over the time it's used. Land, trading stock and some intangible assets are not depreciating assets."
Depreciating assets include usable items such as computers, electric tools, furniture and motor vehicles that are losing value and functionality over time. On the other hand, land and items of trading stock are specifically excluded from the definition of depreciating asset, because the nature of the asset is not subjected to wear and tear.
ATO publishes a list of depreciating assets, which is available online for preview. In fact, most intangible assets are also excluded from the definition of depreciating asset according to ATO guidelines. There are only rare exceptions of that rule, and most of them are in the intellectual property area.
However, if you improve the land or build fixtures on land, for example, a fence, then the fence would also be considered as a depreciating asset. Even though it might sound a bit confusing, every asset which is not an integral part of the land itself can be depreciated, removable or not.
Use a Property Depreciation Calculator
If you need to calculate the depreciation of your property, you should use a property depreciation calculator to get at least a general idea about the tax deductions you can claim. Therefore, according to the Australian tax law, you can claim tax deductions on:
- The decline in the value of the building’s structure
- The decrease in value of the items permanently attached to the property
- The wear and tear of the plant and equipment assets found on/in the property
Thus, it becomes understandable why it is a prudent idea to use a calculator to find out the rough estimate of the tax deduction. Additionally, most of the time when you’re signing the Contract of sale of real estate, the depreciation is already calculated into the full price.
Use a Home Depreciation Calculator
Another option is to use a home depreciation calculator. For example, the Washington Brown calculator features each of the alternatives mentioned here in one place. However, that is not the case with all depreciation calculators you’ll find on the internet.
Use a Depreciation Calculator - Investment Property
Since the passing of the Treasury Laws Amendment (Housing Tax Integrity) Act in 2017, depreciation on investment properties is one of the more popular topics for quantity surveyors and investors. Therefore, the need for a depreciation calculator for investment property is apparent. Not only that, but there are differences between buying an investment property before or after 7:30 p.m. on May 9, 2017, but depreciation is also used as a tool for smarter investing.
Even though, according to the official stance of ATO, over 80 percent of depreciation falls under the category of depreciating assets, instead of capital works deductions, we’re still going to explain a little about how that works with old and new investment properties. Furthermore, calculating the depreciation should be one of the key elements to your investment strategy before you decide to purchase any property.
Capital Works Deductions for New Buildings
The depreciation for the cost of building the investment property is spread over 40 years. According to ATO, that’s the approximate length of time a building lasts before it needs replacing. You claim depreciation each year over the extended period of time.
Capital Works Deductions for Old Buildings
If the property was built after September 15, 1987, you’d be able to claim 2.5 percent depreciation on the original construction cost. That’s each year until the property is 40 years old. As you can see, it’s evident that you can claim more capital deductions for a new building instead of an old one.
Take advantage of the massive Washington Brown database, and use the depreciation calculator to determine your tax reductions in the next 10 years.
Get a free depreciation quote from Washington Brown today!