Is a depreciation schedule worth paying for?

May 17th, 2010

The whole purpose of a depreciation schedule is that it allows you to claim the greatest tax deductions that you may be entitled to.

In simple terms, you need to declare the rent that you receive as assessable income but you are then able to claim expenses. These expenses cover the normal costs such as the interest on the loans, repairs and management fees paid to the real estate agent and you would normally find that the expenses are greater than the income – hence the term negative gearing.

However, the Australian Taxation Office also lets you claim a further tax deduction by increasing the amount that you can claim as an expense (without having to actually pay the money) and this is called depreciation.

The amounts that you can claim as depreciation can be quite high and does depend on many factors but, having said this; it would be unusual based on our experience for this to not be worthwhile. There is a once off cost but the benefits that can be claimed back can go for up to 40 years depending on the age of the property and the work that has been done as improvements e.g new kitchen.

If you need a referral for a depreciation schedule, then please contact us and we will provide the necessary information.