Depreciation Schedules
What is a Depreciation Schedule?
A depreciation schedule is a report that outlines the tax deductions you’re entitled to based on your property’s depreciation. Your accountant will use it to ensure you’re claiming the maximum amount each year.
- Building Depreciation: 2.5% per year over 40 years
- Asset Depreciation: Faster depreciation on assets like carpets, appliances, and fixtures.
A depreciation schedule can typically be used for up to 20 years or more, depending on changes to the property.
Why do you need a Tax Depreciation Schedule?
If you own a rental property or an investment property, a depreciation schedule is a must-have. Many property owners don’t realise how much tax they’re missing out on by failing to claim depreciation deductions.
Here’s why a property depreciation schedule is important:
- Maximise Tax Deductions: Claim depreciation on the building structure and its assets (e.g., appliances, flooring, etc.).
- Save Money: Depreciation deductions can significantly reduce your taxable income, giving you more money in your pocket.
- Cashflow Boost: Yearly deductions improve your cash flow and property returns.
- Compliant with the ATO: Ensure your deductions are in line with the Australian Taxation Office (ATO) guidelines and legislation.
Hear From Our Satisfied Clients
What does our Property Depreciation Report include?
At Jim’s Building Inspections, we provide a clear, comprehensive depreciation schedule that includes:
- Building Depreciation: 2.5% per year for 40 years
- Asset Depreciation: Items like carpets, air conditioners, and appliances
- ATO Compliance: Fully compliant with the latest ATO guidelines
- Easy-to-Use Report: Ready for your accountant to process with no hassle
Our depreciation schedules ensure you’re getting all the deductions you’re entitled to.
Benefits of Depreciation Schedule for Rental Property
A depreciation schedule is especially beneficial for rental properties, as it can save you substantial amounts on your tax return. Here’s why it’s so important:
- Depreciate Both the Building and Assets: Claim depreciation on both your building and assets (appliances, carpets, etc.) for maximum deductions.
- Fast Return on Investment: Many investors recoup the cost of the depreciation schedule within the first year through tax savings.
- Cash Flow Boost: Regular depreciation deductions improve cash flow by reducing taxable income.
- Secure Investment: Protect your investment by ensuring you’re not leaving money on the table.
Frequently asked questions
What is the difference between Depreciation Schedules on New vs. Old Homes?
For new homes, you can depreciate both the building and the assets. For older homes, you can depreciate the building and only claim deductions on assets you’ve installed or replaced.
What if I’ve been renting my property out for a while already?
No problem! Your depreciation schedule can be backdated, allowing you to amend prior tax returns and claim deductions you missed. This applies only for years when the property was income-producing and still within the ATO’s amendment period. Please contact our expert for the details.
Are all Depreciation Schedules the Same?
Not all depreciation schedules are equal. A good depreciation schedule should provide a comprehensive breakdown, be ATO-compliant, and be easy for your accountant to use.
Are your Depreciation Schedules ATO Compliant?
Yes! Our depreciation schedules are prepared by trained professionals and are fully compliant with ATO guidelines.
What’s involved and how long does it take?
To get started, provide some basic details about your property, and we’ll send an accurate quote. After a quick inspection, we’ll provide your depreciation schedule, usually within 7–10 days.
What is included in a Depreciation Schedule?
Your depreciation schedule includes building depreciation (2.5% per year for 40 years) and asset depreciation (for items like carpets, appliances, etc.). We also ensure it’s ATO-compliant and ready for your accountant.
How much does a depreciation schedule cost?
Costs vary depending on the size and complexity of your property. Contact us for a free, no-obligation quote tailored to your needs.
Can I claim tax deductions on my investment property every year?
Yes, you can claim property depreciation every year, ensuring you benefit from tax deductions annually.
Why is property depreciation important for investment properties?
Property depreciation helps reduce your taxable income, leading to more cash flow and tax savings—especially important for long-term property investors.