C&G’s Guide to Tax Depreciation Schedules

After many years, you will notice the natural wear and tear that inevitably affects your property and its furnishings. It is problematic for landlords, as their asset consequently decreases in value and it can be difficult to maintain a competitive market rent. Fortunately the Australian Taxation Office (ATO) recognises this issue, and allows property owners to claim tax depreciation. What is this, you ask? C&G’s latest blog discusses this scheme, and details what you can claim with a tax depreciation schedule.

The depreciation scheme is often overlooked because of its non-cash nature. This means that landlords don’t need to spend their money in order to make a claim. Many property investors self-assess and lodge their own tax returns, unwittingly excluding themselves from legitimate tax benefits. We highly recommend consulting a tax expert to correctly determine depreciation rates, and your eligibility as a landlord.

What is a tax depreciation schedule?

A tax depreciation schedule consists of two components: capital works allowance and plant and equipment assets. Residential and commercial properties fall under the capital works category, and refer to items permanently attached to the property. These items often require ongoing maintenance, such as walls, built-in cupboards, doors, roofs, and bathroom fixtures. The deductions you can claim will vary depending the type of asset, and even your industry if you own a commercial property. Plant and equipment assets refer to items that can be removed from the property and which have a limited lifespan.  This includes air conditioning and heating units, security systems, carpets, dishwashers, cooktops, blinds and curtains.

How do I claim depreciation?

It is highly recommended you engage a quantity surveyor to produce the depreciation schedule. They will produce a report that determines the deductions available for capital works and plant and equipment assets. When you prepare your tax return, you can rest assured you’re receiving the best refund possible.

Looking for an expert opinion? Chisholm and Gamon have a strong network of professional connections, from quantity surveyors to accountants. We would be delighted to answer your questions, and can refer you onto a specialist if you need further assistance. Reach out to us today!


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