Bought an investment property late this financial year?

Buying an investment property close to 30 June doesn’t mean you’ve missed out on tax deductions for that financial year. 

In fact, even if you’ve owned your property for only a short period before the end of the financial year, you may still be entitled to claim valuable depreciation and other deductions. 

With recent Federal Budget changes placing greater importance on the timing and tracking of deductions, capturing these from day one has never been more important.  

Can You Claim Depreciation If You Buy a Property Late in the Financial Year? 

Yes, you can claim depreciation even if you purchase an investment property late in the financial year. Deductions are calculated on a pro-rata basis from when the property is available for rent, meaning even a short ownership period can result in claimable depreciation. 

Can You Still Claim Deductions for Short Ownership Periods? 

Absolutely. 

Whether you’ve owned the property for only three days or three months by 30 June, you may still be entitled to claim: 

• Pro-rata building depreciation (Division 43) 

• Pro-rata plant and equipment depreciation (Division 40) 

• Immediate write-off assets 

• Low-Cost pool deductions 

Even a short ownership period can generate meaningful deductions — either as an immediate tax benefit or as future tax savings. 

How Is Depreciation Calculated for Part-Year Ownership? 

Depreciation is calculated on a pro-rata basis from the date the property is available for rent. This means investors can claim a portion of both building and asset depreciation even if the property was only held for a short time before 30 June. 

How Much Can You Claim? 

Investors can claim thousands of dollars in depreciation, even when holding a property for only a short period before the end of the financial year. 

For brand-new properties in particular, first-year claims may include: 

• Construction write-off 

• Brand-new fixtures and fittings 

• Low-cost and immediate write-off assets 

Understanding exactly how these deductions are calculated — and what applies to your property — is key. You can read more in our guide to tax depreciation schedules for investment properties. 

Immediate Write-Off and Low-Cost Assets Explained 

Immediate Write-Off (Under $300) 

Assets costing under $300 may be immediately deductible, provided they: 

• Are used to produce income 

• Meet ATO eligibility criteria 

Examples include: 

• Smoke alarms 

• Exhaust fans 

• Door closers 

Low-Cost Pool ($300–$1,000) 

Regardless of the number of days the asset has been owned in the first financial year assets costing between $300 and $1,000 can typically be allocated to a Low Cost pool. Whether it’s held for just 3 days or even 300 days, the cost of the asset is depreciated at: 

• 18.75% in the first year 

• 37.5% each year thereafter as a Low Value Asset 

Examples include: 

• Blinds 

• Ceiling fans 

• Garage door motors 

• Rangehoods 

Timing Tip 

If you’re planning upgrades or installations, completing them before 30 June may allow you to include them in that year’s depreciation calculations. 

Case Study: Claiming Depreciation in Just 5 Weeks 

Our clients Ashani and Sylvia purchased a brand-new three-bedroom unit on 20 May and made the property available for rent the following day. 

Despite owning the property for just over five weeks, they claimed: 

✅ $8,124 in depreciation deductions 

These deductions either: 

• Reduced their taxable income immediately, or 

• Will be available to offset future rental income or capital gains, depending on the property type and purchase timing 

How Do the 2026 Federal Budget Changes Affect Property Deductions? 

The 2026 Federal Budget proposes changes to negative gearing for established properties. 

From 1 July 2027, some investors may no longer be able to offset property losses against personal income. Instead, these deductions may be carried forward and used to offset future rental income or capital gains. 

For a full breakdown of these changes, read our detailed guide on Budget Changes and Depreciation: What Property Investors Need to Know in 2026–27 

Why Timing Matters More Than Ever 

The value of depreciation has become more strategic under the proposed Federal Budget changes. 

For investors in new properties, deductions — including depreciation — are expected to continue reducing taxable income immediately, making early ownership claims highly valuable. 

For some established properties, however, these deductions may no longer reduce taxable income straight away. Instead, they may be carried forward and used to offset: 

• Future rental income 

• Capital gains on sale 

These changes are closely linked to how negative gearing rules for property investors are evolving, particularly for established properties. 

They can also impact your capital gains tax (CGT) outcomes on investment property over the long term. 

This means capturing depreciation from day one is critical — not just for immediate tax benefits, but to ensure deductions are accurately calculated, recorded and available to reduce future tax liabilities. 

Delaying a depreciation schedule can lead to missed or incorrectly tracked deductions, particularly where losses need to be carried forward under the new rules. 

New vs Established Property – Why It Matters 

While these strategies apply to all investment properties, they are particularly powerful for new builds. 

Under the proposed Budget changes: 

• New properties are expected to retain full access to negative gearing benefits 

• Established properties may have deductions quarantined 

This means depreciation provides immediate tax benefits for new properties, while building future tax savings for established properties. 

What Other Expenses Can You Claim? 

In addition to depreciation, investors may also be able to claim: 

• Interest on loans 

• Council rates and water charges 

• Insurance premiums 

• Accountant and bookkeeping fees 

• Quantity surveyor reports 

Claiming all eligible deductions helps improve your overall tax position — either immediately or over time. 

Don’t Wait Until Next Financial Year 

If your property settles before 30 June, you don’t need to wait another year to start claiming deductions. 

Even a few days of ownership can: 

• Generate significant depreciation claims 

• Improve your current or future tax position 

Get the Most From Your Investment Property 

With the timing of tax deductions becoming more important under recent Federal Budget changes, having an accurate depreciation schedule from day one is critical. 

👉 Contact Capital Claims Tax Depreciation for a free personalised quote of your deductions. 
📞 1300 922 220 

FAQs 

Is it worth getting a depreciation schedule for a short ownership period? 

Yes. Even a short ownership period can generate meaningful depreciation deductions, either as an immediate tax benefit or as future tax savings, depending on how the deductions apply to your property. 

How long can you claim depreciation on an investment property? 

Capital works depreciation can generally be claimed for up to 40 years from the construction date, provided the property is income-producing. 

Can property depreciation be backdated? 

Yes. Property depreciation can often be back-claimed, depending on your previous tax returns and individual circumstances. 

Can you depreciate an older investment property? 

Yes. Older investment properties may still be eligible for capital works deductions and depreciation on qualifying improvements and eligible assets. 

Do I still need a depreciation schedule if deductions are carried forward? 

Yes. A depreciation schedule is essential to accurately calculate and track deductions each year, particularly where losses may need to be carried forward under current tax rules.