A Tax Depreciation Schedule is a comprehensive report that outlines the historical construction costs and asset values of a property, as well as an annual value for their depreciation due to ageing and wearing out.
A Tax Depreciation Schedule can also be referred to as:
Find out more about how a Tax Depreciation Schedule helps maximise your tax claim, and free up cash flow for you or your business
A tax depreciation schedule will outline the deductions claimable for your Division 40 (Plant and Equipment) and Division 43 (Building Write-Off) claims when completing your tax return. It is important that these deductions are correctly assessed and estimated to ensure ATO compliance in case of an audit.
Some accountants say they can calculate these deductions for you, but accountants are not recognised by the ATO as qualified to estimate construction costs and asset values.
Accountants can only work off given costs (receipts and invoices) and are not qualified to estimate total costs. It is important that a recognised professional completes your depreciation schedule for you for compliance purposes.
Once you have received your Tax Depreciation Schedule simply email it to your accountant, or take it along to your appointment so that they can include the calculated figures in your tax return. At Capital Claims we can email the schedule directly to your accountant if that is helpful for you.
If you are completing your tax return yourself, you can use the figures included to enter the correct amounts into the rental property section of the ATO tool. If you are unsure how to apply the results yourself you can contact us at Capital Claims, or the ATO for further guidance.
Costs for depreciation schedules vary within the industry by a few hundred dollars. Quality depreciation schedules, that incorporate works completed by previous owners, plus your own renovations and scrapping where necessary can cost at least $770.00 at the more expensive end.
A Capital Claims Tax Depreciation Schedule costs from $440.00 for brand new homes (where costs and additional data are provided), and up to $715.00 for more complicated reports that require a full inspection and additional research and cost estimating. The majority of our reports clients pay between $440.00 and $690.00 incl GST.
Our reports are fully inclusive of everything required to maximise your result and maintain ATO compliance.
Remember that the fee for your tax depreciation schedule is 100% tax deductible in the year your purchase it, and paying for a quality report will typically ensure thousands of dollars in additional tax deductions over the life of your investment.
Ensure your Quantity Surveyor is a registered Tax Agent – registered with the Tax Practitioners Board of Australia;
Use a specialist provider – calculating and reporting Capital Allowances and Tax Depreciation is not a core business for many Quantity Surveyors. A specialist will be up-to-date with the most relevant legislation and have the most experience in interpreting legislation and tax rulings to maximise the claims for your particular scenario;
Make sure your depreciation schedule includes all of the features listed above.
Your chosen provider should also:
Complete a free desktop assessment to provide a personalised estimate of deductions;
Undertake all necessary property searches;
Arrange the property inspection where required; and
Liaise with you or your accountant to discuss the report going forward.
We’ll include an estimate of available deductions, and if we can’t guarantee a strong result, we’ll let you know up front and there will be no cost to you.