The facts, and figures
Nick purchased this four-bedroom house for $995,000 in June 2023
Renovations completed by previous owner in 2022 were kitchen, laundry, bathroom, deck and built-ins
Nick is receiving $720 per week with a total rental income of $37,440 per annum
Without a tax depreciation schedule, Nick’s tax deductible expenses per financial year for the property totalled $68,472
Nick’s tax bracket is 32.5%
After applying the tax depreciation schedule, in the first full financial year 2024 Nick’s after-tax return was $2,256. Weekly cash flow back to Nick is $43.38
The outcome
Nick contacted Capital Claims Tax Depreciation who provided a detailed tax depreciation schedule. Nick was entitled to claim in tax depreciation deductions $6,241 in the first financial year and $31,205 across the first five financial years of ownership of his property. Total deductions claimable over the life of the property equal $237,158.
The value of Nick’s accumulated depreciation deductions for his plant and equipment assets ie. carpet, blinds, and stove (Division 40) is still of benefit as a future CGT offset amount. Depending on if or when they sell, their CGT offset amount could be up to $28,484.
