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
About the author
About the author
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
