Tax Depreciation Schedule

What is a Tax Depreciation Schedule?

A tax depreciation schedule is a detailed report prepared by a qualified quantity surveyor that outlines all the depreciation deductions you can claim for your investment property. Depreciation refers to the decline in value of assets over time, and in property terms, this includes both structural elements of the building and removable items such as appliances and fixtures.

The schedule allows you to claim deductions for:

1. Capital Works Deductions (Division 43): These are deductions for the building’s structural elements, including walls, roofs, and flooring. Typically, properties built after 1985 are eligible. The deductions are usually spread over 25 to 40 years.
2. Plant and Equipment Deductions (Division 40): These deductions apply to items that naturally wear out or are replaced over time, such as ovens, carpets, air conditioners, and blinds.

Claiming both types of deductions ensures you’re maximising the potential tax benefits of your investment property.

Why Melbourne Property Owners Should Consider a Depreciation Schedule

The Melbourne property market is highly competitive, and property investors need every advantage to improve their returns. A tax depreciation schedule can help in multiple ways:

• Increase Cash Flow: By claiming depreciation, your taxable income reduces, which means you pay less tax and keep more money in your pocket.
• Maximise Deductions: Many investors are unaware of the deductions they’re entitled to. A depreciation schedule ensures no opportunity is missed.
• Plan Long-Term Investments: Understanding your property’s depreciation potential allows you to forecast future expenses and returns more accurately.
• Support Renovations and Upgrades: A professional depreciation schedule can account for recent improvements or renovations, helping you claim additional deductions.

For many Melbourne investors, the potential deductions can total thousands of dollars annually, which, over time, can significantly improve the overall return on their investment.

How Elevate Building Inspections Supports Your Depreciation Schedule

While quantity surveyors prepare tax depreciation schedules, the accuracy of property information is critical. This is where Elevate Building Inspections can help. Our inspections provide a detailed and precise assessment of your property, ensuring your surveyor has the exact information needed to create an accurate schedule.

Our inspections cover:

• Structural Components: Including walls, floors, ceilings, and roofs that may qualify for capital works deductions.
• Fixtures and Fittings, such as ovens, light fittings, air conditioning units, and carpets, can be claimed under plant and equipment deductions.
• Renovations and Modifications: Identifying updates to the property that may impact depreciation claims.

By combining a professional building inspection with a tax depreciation schedule, you ensure every eligible asset is accounted for and that your tax benefits are maximised.

Examples of How Depreciation Can Benefit You

Let’s say you purchase a Melbourne apartment for $600,000. A detailed depreciation schedule may identify:

• Structural deductions (Division 43) for the building’s walls, roof, and floors: $5,000 per year.
• Plant and equipment deductions (Division 40) for kitchen appliances, carpets, and air conditioning: $3,500 per year.

That’s a total of $8,500 in potential deductions annually—money that can be reinvested into your property, used for other investments, or saved on taxes. Over 10–15 years, this adds up to a significant financial advantage.

Choosing the Right Tax Depreciation Schedule Provider

To ensure you maximise your claims, it’s important to work with a qualified quantity surveyor experienced in Melbourne properties. When paired with an Elevate Building Inspection, you get:

• A thorough property assessment ensuring all eligible deductions are identified.
• Detailed documentation to support your tax return, reducing the risk of errors or missed claims.
• Professional advice on how renovations or upgrades may impact depreciation.

Our inspections provide peace of mind that your property’s value is fully understood, which is vital when it comes to claiming depreciation.

Common Questions About Depreciation Schedules

1. Do I need a schedule for old properties?

Yes. While capital works deductions apply only to properties built after 1985, plant and equipment deductions may still apply to older properties, depending on the assets included.

2. Can I get a depreciation schedule after I buy a property?

Absolutely. Even if you’ve owned the property for several years, you can still engage a quantity surveyor to prepare a schedule and claim retrospective deductions.

3. How often should the schedule be updated?

A schedule typically remains valid for 25 years, but it should be updated if you make significant renovations or additions to the property.

Conclusion

A tax depreciation schedule in Melbourne is an essential tool for any property investor looking to improve cash flow and maximise returns. By accurately identifying all eligible deductions, you can reduce your taxable income and make the most of your investment.

At Elevate Building Inspections, we provide detailed property inspections that support your depreciation schedule, ensuring no asset is overlooked. With our professional inspections and a qualified quantity surveyor, you can confidently claim all available deductions and enjoy the full financial benefits of your Melbourne property investment.

Investing in property is more than buying a home—it’s about maximising your returns. Start with a professional inspection and a detailed tax depreciation schedule to unlock your property’s full potential.