Tax Depreciation Schedules for Investment Properties

What is a Tax Depreciation Schedule?

A Tax Depreciation Schedule is a document prepared by a qualified Quantity Surveyor or tax professional that lists the depreciation claims that an investor can make on their property. The schedule breaks down the depreciation of both the building’s structure and the assets within it, such as appliances, fixtures, and fittings, over their useful life.

There are two main types of depreciation that can be claimed on investment properties:

Capital Works Depreciation (Building Depreciation): This applies to the structural components of a property, such as walls, floors, and roofs. Depreciation for this category is typically claimed over a period of 25 to 40 years, depending on the property's construction date and type.
Plant and Equipment Depreciation: This applies to the movable items in the property, like carpets, air conditioners, hot water systems, and other appliances. These items depreciate over shorter periods, typically ranging from 5 to 20 years.

How a Tax Depreciation Schedule is Created

Benefits of Having a Tax Depreciation Schedule

Maximised Tax Benefits: A professionally prepared schedule ensures all possible depreciation claims are identified and used, maximising tax benefits.
Improved Investment Returns: Tax savings from depreciation can increase the overall return on investment for the property.
Strategic Financial Planning: A depreciation schedule provides a clear understanding of future tax deductions, assisting in financial planning and budgeting.
Compliance and Peace of Mind: Using a qualified professional to prepare the depreciation schedule ensures compliance with tax regulations, reducing the risk of audits or fines.

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