Free quotes. Obligation free advice.
We're here to help you.


Why Is Tax Depreciation Important For Property Investors?

September 08, 2020

“Tax depreciation plays a pivotal role in reducing the financial burden for property investors!” – Zac Gleeson

There are many reasons why depreciation is important to property investors:

  • It helps improve cash flow to the property investor.
  • It can reduce the tax payable.
  • A negative-geared house loss can be reduced.
  • A brand-new property can be affordable.
  • Annual deductions are typically thousands of dollars for the residential property investor.
  • Commercial property owners and leasees are often both able to claim and benefit.
  • Annual deductions for commercial properties can often run into the hundreds-of-thousands of dollars.

Why do I need to claim the tax depreciation deduction?

Most investors would agree with me that “you need to maximise your cash flow”. One of the ways to do this is by claiming all-of the available tax deductions to you. The tax depreciation deduction along with the other available tax deductions will help reduce your tax payable and has the ability to put more money back in your pocket.

Many investors know that they can claim tax deductions for interest, property management fees, repairs and maintenance. But, many investors, also miss out on claiming the tax depreciation deduction. Maybe they didn’t know about it, they were confused as to their eligibility for it, or worst of all, they were told they couldn’t claim it by their accountant.

With interest rates being so low, the tax depreciation deduction could potentially be the biggest deduction claimable for some property investors.

Would you want to leave $1,000 in tax depreciation deductions unclaimable? What about $10,000? What about $100,000?

Claiming tax depreciation can make property investing affordable

A property’s Tax Depreciation Schedule is calculated and projected or forecasted over 40 financial years. Each year’s claim is composed of the amount you can claim for Division 43 (the structural part of the property) and Division 40 (brand-new assets or plant and equipment items only).

How do I claim my tax depreciation deduction?

The quickest and easiest way to claim these deductions is to organise a tax depreciation schedule from a quality quantity surveyor. They will prepare a Tax Depreciation Schedule for your accountant to apply. Please note that your accountant is not qualified by the ATO to estimate construction costs to generate this deduction for you.

Do all property investors need a tax depreciation schedule?

In order to maximise your all your Capital Allowance and Tax Depreciation deductions, you should investigate getting a tax depreciation schedule. Owners of qualifying residential property’s, commercial property’s or, leasee’s of commercial property’s who would like to claim one of their biggest tax deductions, need to order a tax depreciation schedule.

Do I need to pay for my tax depreciation schedule every year?

No. A schedule is a one-time investment that is also fully tax deductible in the year you purchase it.

Get the professional support you need by contacting one of our team members at GQS!

Full Article:

Wilkins, M. (2020, August 26). Why is tax depreciation important for property investors? Retrieved from