4 Bedroom House Built in 1973
A Case Study of savings from our expertly prepared Depreciation Schedule.
The facts, and figures
Nick purchased this four-bedroom house for $495,000 in June 2020
Renovations completed by previous owner in 2014 were kitchen, laundry, bathroom, deck and built-ins
Nick is receiving $420 per week with a total rental income of $21,840 per annum
Without a tax depreciation schedule, Nick’s tax deductible expenses per financial year for the property totalled $32,460
Nick’s tax bracket is 37%
After applying the tax depreciation schedule, in the first full financial year in 2021 Nick’s after-tax return was $1,072. Weekly cash flow back to Nick is $20.67.
The outcome
Nick contacted Capital Claims Tax Depreciation who provided a detailed tax depreciation schedule. Nick was entitled to claim in tax depreciation deductions $2,599 in the first financial year and $12,995 across the first five financial years of ownership of his property. Total deductions claimable over the life of the property equal $115,965.
Also Nick’s property falls under the current legislation where a value is assigned to existing plant and equipment assets – Division 40. This may help reduce Capital Gains Tax when the property is sold. If Nick sells his property in 7 years, he is entitled to claim $17,984 in Division 40 depreciation to offset his Capital Gain.
Project Data
Client name:
Nick
Asset:
four-bedroom house
Purchase Price:
$495,000
Year Purchased:
2020
First Year Claim:
$2,599
Claimed over 5yrs:
$12,995
Claimed in total:
$115,965
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