Invest
5 helpful hints on depreciating investment property
If you’re a property investor, make sure you’re claiming all the deductions that you can. Property investors often ignore depreciation and miss out on some of the huge tax benefits.
5 helpful hints on depreciating investment property
If you’re a property investor, make sure you’re claiming all the deductions that you can. Property investors often ignore depreciation and miss out on some of the huge tax benefits.
Under Australian income tax law, you are allowed to claim deductions for expenses incurred in earning rent, including the depreciation of assets in the buildings and the cost of the building itself. Read on for five helpful depreciation hints below.
- Investors can claim capital works deductions for the construction cost of residential buildings, and these capital works deductions can amount to large values. Capital allowances can be claimed on your original residential property, where it was constructed after the 15 September 1987, or on any subsequent renovations or improvements completed by the previous owner or yourself, says MCG Quantity Surveyors.
- Investors can also claim depreciation for wear and tear on fixtures and fittings in the property, such as carpet, blinds, wardrobes, curtains, ovens and many more items. Assets are depreciated over their effective life, on which the ATO regularly publishes guidelines.
- As soon as you buy an investment property, you should get a tax depreciation schedule (TDS) prepared by a quantity surveyor. By claiming their full depreciation deductions, property investors can greatly improve the cash flow of any investment property, regardless of whether it is a house or unit. A TDS lists all items in a property that are falling in value, as well as annual depreciation allowances, including capital works deductions. The report can cost between $500 and $1,500 (which is tax deductible) and can cover up to 40 years of deductions.
- Some new properties come with a TDS, but investors should always get their own prepared to ensure they are taking full advantage of depreciation allowances.
- The 2017-18 federal budget limited depreciation claims on properties purchased after 9 May 2017. A property investor can no longer depreciate plant and equipment assets installed by a previous owner. “Only components that you have purchased yourself will be claimable,” says MCG. Properties purchased before 9 May 2017 are unaffected by the changes.
RELATED ARTICLES
-
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
-
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
-
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
About the author
About the author
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
