What is Tax Depreciation?
Depreciation is an accounting term that describes the declining value of an asset as it ages and wears out over time.
Even though many properties appreciate (increase in value) each year, from an accounting and ATO perspective the buildings and their assets actually age and decline in value each year.
Every year the lost value of those assets is claimable by owners as a tax deduction.
Depreciation is claimable under 2 types of ATO allowances: Division 40 and Division 43:
Division 40 is the legislation that covers the depreciation of ‘plant and equipment’ within an Australian investment property. Each plant and equipment item has an effective life set by the Australian Taxation Office (ATO) and the depreciation deduction available on that item is calculated using this effective life.
Otherwise known as ‘Capital Works Allowance’ or ‘Building Write-Off’, Division 43 covers the deduction available to owners for the structural elements of the building and the items within the property that are deemed irremovable.
How do I claim depreciation on my investment property?
Order your Report
We do the work
Claim your deductions
We need some basic information to get started, such as your property address and contact details to arrange access. Get in touch today and we will be happy to guide you through the process and provide as much assistance as you need.
Our expert team will arrange inspection, conduct relevant property searches, estimate construction costs, assign asset values and effective lives, forecast claims over 40 years and deliver your report in a user-friendly format within 10 days of inspection (providing we have all relevant details from you).
Simply take your report along to your accountant, or have us deliver it directly, and start improving your cash flow straight away!