Tax Depreciation

Your investment property is comprised of many assets that have differing useful lives that depreciate annually, as the property owner you are entitled to claim the depreciation as an expense that can be applied against the income your investment earns.

Properties which are eligible for a tax depreciation are investment properties that have been built, extended, refurbished or renovated since 18th July 1985.

Investment properties include:

  • residential
  • commercial freehold
  • industrial freehold
  • agricultural
  • apartments

To calculate the annual depreciation a registered property valuer (PRP) completes a schedule identifying all of the assets that comprise the investment property with a break down of the diminishing value over each year. As part of the valuation process a licenced Quantity Surveyor signs off on the schedule and your accountant or tax agent can then include the annual depreciation figure as an ATO compliant deduction in your tax return.

A report is completed once, and the schedule covers your deductions for up to 40 years.

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