It doesn’t matter when you bought your investment property – even if it's just a couple of weeks out from the end of the financial year – it’s always worth getting a depreciation schedule looked at sooner rather than later. 

Rental property tax deductions checklist download here

Whether you’ve owned the property for only three days or three months on June 30 – you may still be entitled to claim for immediate write off, low cost assets, as well as pro-rata of the building and large assets. You’d be surprised to find out many investors claim as much as $3,000 for brand-new properties and more for just the first week of holding their investment property. 

Immediate write-off assets are anything you’ve bought brand-new for the building that was under $300 – things like smoke alarms, door closers, exhaust fans and so on.

In addition, any asset you’ve bought brand-new between $300 and $1,000 can be depreciated as a low-cost asset by 18.75% of its value in the first year. Think blinds, ceiling fans, automatic garage door motors, range hoods etc. As a tip, if you’ve been considering installing any new items in the property, now’s a great time to go out and purchase them and claim their depreciation in this year’s tax return. 

Case Study 

Our clients Ashani and Sylvia purchased a brand-new three-bedroom unit in a large complex on the 19th of May 2022.  They organised a tax depreciation schedule from us as their property was available for rent on the 20th of May 2022.  

Ashani and Sylvia were entitled to claim $6,124 in tax depreciation deductions for just over 5 weeks of ownership in the 2021-2022 financial year.  The tax depreciation claim helped reduce their tax payable income and to say they were happy is an understatement.   

Unfortunately, not many people are aware that you are able to make these claims – including some accountants - so if you have just purchased an investment property, it is well worth checking what depreciation deductions you would be entitled to this year. 

You can also request a free personalised estimate of depreciation claims you can expect to receive in the first full financial year specifically for your property. 

It’s also well worth keeping in mind that if you have a property that is under construction and likely to be handed over around the end of this financial year, completing the purchase before June 30 means you won’t have to wait a year to claim your deductions. 

Similarly, if you are purchasing a property you will be able to recoup some of your costs through savings you’ll make from depreciation. 

So, if you've just bought an investment property or our buying one soon be sure to contact us for an estimate or a quote. You could improve your tax return by thousands. 

Who can I talk to about depreciation for my investment property?

A Capital Claims Tax Depreciation team member will be very happy to answer any questions you may have about claiming depreciation on your investment property.   You can contact Alex during business hours on 1300 922 220 or via email on alexk@capitalclaims.com.au. 

What expenses can I claim when buying an investment property? 

As a property investor, the Australian Tax Office allows you to claim for expenses that you incur whilst owning your investment property.  By claiming all the eligible tax deductions, it can help reduce the income tax payable.   

Examples of expenses property investors can claim for are: 

  • Accountants fees, Bookkeeping fees and fees for accounting software 
  • Insurance Premiums – building, contents, public liability, landlord insurance
  • Interest expense - on the loan amount
  • Mortgage insurance – treated as a borrowing expense
  • Quantity Surveyor report – for claiming Capital Allowance and Depreciation 

Find out here what other tax deductions are available to property investors.  Download our FREE Rental Property Tax Deductions Checklist.  

Is it worth having an investment property? 

Before purchasing an investment property, you need to do your research and check your financial situation.  An investment property over time can increase in capital growth, has tax benefits available to help reduce a property investors income tax payable and can even be cash flow positive – rent covers the monthly costs for owning the investment property.   

An investment property can certainly be worth it and a great wealth creator for some, but it is always best to check in with your financial adviser before you purchase.  

Related articles:

What tax deductions can I claim on my rental property this financial year?

Can investors claim depreciation on second-hand properties since the legislation change in May 2017

What is Division 43 or Capital Works?


click to estimate tax depreciation deductions for rental property

About Mark Wilkins

Mark is an expert quantity surveyor, business owner, public speaker and property developer. With 20+ years experience in the construction and quantity surveying industry Mark’s specialist expertise have been sought in consultant capacity by professional bodies such as the National Institute of Accountants and the National Tax and Accountants Association, and he has presented at various property and tax seminars and expos nationwide. Mark holds a Bachelor of Construction Management from the University of Newcastle, is an affiliate member of the Australian Institute of Quantity Surveyors and a Registered Tax Agent.

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