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You are here: Home1 / Blogs2 / Tax Depreciation Calculator: The Benefits of a Tax Depreciation Schedule...

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Tax Depreciation Calculator: The Benefits of a Tax Depreciation Schedule with Sample Calculations

October 13, 2021

What is Tax Depreciation?

The Australian Tax Office (ATO) allows for the costs of construction and fit out of investment properties to be claimed back over time against the income earned on the property.

How does a Tax Depreciation Schedule work?

  1. A physical inspection of your property is carried out to assess all eligible items.
  2. A Tax Depreciation Schedule is prepared by a qualified Quantity Surveyor, who calculates the available deductions for the property.
  3. You are provided with a Tax Depreciation Schedule that details the eligible amounts that can be claimed in your tax return over a 20 or 40 year period.

Who can make a claim?

All owners of income-producing property should investigate whether their property qualifies for a Tax Depreciation Schedule.

If the building improvements don’t give rise to a claim, a claim for the fittings or plant items may be possible.

Tax Depreciation Schedules are applicable to all property types, including:

  • Commercial
  • Residential
  • Agribusiness
  • Plant and Equipment
  • Internal Fit Out

Almost every Commercial property type will qualify, which can benefit both the landlord and tenant. If the building improvements don’t give rise to a claim, a claim for the fittings/plant items may be possible.

Remember: If the building is too old, there may still be an eligible claim for renovation works.

What can be claimed?

Division 40: Plant and Equipment

You may be able to claim for Division 40 Plant and Equipment, which covers things like window furnishings, carpet and floating flooring, remote garage door motors and controllers, kitchen appliances, heaters, air conditioners, ceiling fans, hot water system, smoke alarms, pumps etc.

Division 43: Building and Structural Improvements

You may also be eligible to claim for Division 43 Building and Structural Improvements. Examples include retaining walls, pools, paving and driveways, clotheslines, fencing and pergolas.

Can claims be backdated?

A claim can be backdated up to two years without a variation to a tax return. Claims can be made for periods longer than this with a variation to a previous tax return.

No available deductions? No charge.

Using Opteon as your tax depreciation specialist is risk-free. Submit the details of the relevant property, and if we don’t think sufficient deductions are available for the property to cover our fee, we’ll recommend that you don’t proceed.

Get in touch

Opteon’s Tax Depreciation specialists can work with you to reduce the amount of tax payable on your investment property.

Opteon can prepare a Tax Depreciation Schedule to help you (or your accountant or tax agent) understand how to claim a wide range of potential tax deductions for your investment property.

Call us today on 1300 40 50 60, or contact us by clicking here.

Example Tax Depreciation calculations

Townhouse (First Owner) Annual Tax Allowance CalculatorTownhouse (First Owner) Annual Tax Allowance Calculator

This townhouse was constructed in 2008.

It features three bedrooms and two bathrooms.

This is an example only. Each property is assessed individually on its eligibility.
YEARDIV 43: BUILDINGDIV40: FITTINGS/PLANTANNUAL TOTAL
1$5,184$2,742$7,926
2$8,191$3,482$11,673
3$8,191$2,625$10,816
4$8,191$2,948$11,139
5$8,191$1,241$9,432
6$8,191$1,053$9,244
7$8,191$896$9,087
8$8,191$763$8,954
9$8,191$652$8,843
10$8,191$558$8,749
11+$248,738$3,736$252,474
Total$327,641$20,697$348,338

Townhouse (Second Owner) Annual Tax Allowance Calculator

This example features the same townhouse from the perspective of a second owner.

The contract was settled post-May 2017.

This is an example only. Each property is assessed individually on its eligibility.
YEARDIV 43: BUILDINGDIV40: FITTINGS/PLANTANNUAL TOTAL
1$5,184$0$5,184
2$8,191$0$8,191
3$8,191$0$8,191
4$8,191$0$8,191
5$8,191$0$8,191
6$8,191$0$8,191
7$8,191$0$8,191
8$8,191$0$8,191
9$8,191$0$8,191
10$8,191$0$8,191
11+$248,738$0$248,738
Total$327,641$0$327,641

Apartment Annual Tax Allowance CalculatorApartment Annual Tax Allowance Calculator

This apartment, constructed in 2008, was purchased for $482,000.

Sized at 69sqm plus common area, the apartment features two bedrooms, a basement garage, and a lift.

This is an example only. Each property is assessed individually on its eligibility.
YEARDIV 43: BUILDINGDIV40: FITTINGS/PLANTANNUAL TOTAL
1$743$3,610$4,354
2$4,173$5,721$9,895
3$4,173$4,066$8,239
4$4,173$4,615$8,788
5$$4,173$1,547$5,270
6$$4,173$1,242$5,416
7$$4,173$1,006$5,179
8$$4,173$820$4,993
9$$4,173$673$4,846
10$$4,173$556$4,729
11+$124,342$3,553$127,894
Total$162,645$27,408$190,053

Dairy Farm (Free Hold) Annual Tax Allowance CalculatorDairy Farm (Free Hold) Annual Tax Allowance Calculator

This circa-1970s farm was purchased for $1.62M in July 2014.

The farm is approximately 112 hectares.

This is an example only. Each property is assessed individually on its eligibility.
YEARDIV 43: BUILDINGDIV40: FITTINGS/PLANTANNUAL TOTAL
1$1,442$131,972$133,413
2$1,499$124,855$126,354
3$1,499$106,206$107,705
4$1,499$91,101$92,600
5$1,499$78,660$80,159
6$1,499$68,269$69,768
7$1,499$59,495$60,994
8$1,499$52,021$53,520
9$1,498$45,610$47,088
10$1,444$40,082$41,526
11+$12,549$328,774$341,325
Total$27,406$1,127,045$1,154,452

Warehouse Annual Tax Allowance CalculatorWarehouse Annual Tax Allowance Calculator

In this example, an 861sqm warehouse was purchased for a sale price of $840,000

This is an example only. Each property is assessed individually on its eligibility.
YEARDIV 43: BUILDINGDIV40: FITTINGS/PLANTANNUAL TOTAL
1$3,026$2,387$5,413
2$13,470$5,057$18,508
3$13,470$3,883$17,303
4$13,470$5,171$18,641
5$13,470$1,825$15,296
6$13,470$1,825$15,296
7$13,470$1,825$15,296
8$13,470$1,825$15,296
9$13,470$1,825$15,296
10$13,470$1,239$14,709
11+$331,485$6,374$337,859
Total$455,745$33,167$488,912

DISCLAIMER

This material is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation and property advisory related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s quantity surveyors and valuers are qualified and experienced in providing depreciation schedules of your property. Opteon does not provide accounting, specialist taxation or financial advice. Liability limited by a scheme approved under Professional Standards Legislation.

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https://www.opteonsolutions.com/au/wp-content/uploads/sites/3/2021/10/visual-stories-micheile-SoT4-mZhyhE-unsplash2-scaled.jpg 2560 2560 Rachel Dorian //opteonsolutions.com/au/wp-content/uploads/sites/3/2016/03/opteon-logo.png Rachel Dorian2021-10-13 08:32:582022-02-23 09:51:02Tax Depreciation Calculator: The Benefits of a Tax Depreciation Schedule with Sample Calculations
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