09 March

With more and more Australians taking their properties off grid, are you thinking about making your investment property self-sufficient too?

There are many benefits in having your residential investment property or commercial investment property powered by solar panels:

  • You may be able to claim the depreciation deduction to help reduce your taxable income;
  • Tenants may be happier to pay more rent as they will have a lower electricity bill;
  • Your property could be considered more affordable for tenants with their electricity savings;
  • Your rental yield may increase;
  • You are helping reduce the greenhouse emissions.

Not only can you increase your tax deductions available to you, you’re also able to increase your rental yield. Origin Energy completed a survey and stated that “55% of renters saying they would be willing to pay up to $10 a week more in rent for a property with solar.”

GI Energy have created a guide on how much you can fairly increase your weekly rent depending on the size of the solar panel system Solar for rentals – Calculating benefits.

Are there any rebates for getting solar panels at my rental property?

Yes, there is. The Government Solar Rebates Solar power system rebate it approved for actual property addresses and not a person. If you have a portfolio of rental properties as per energy.gov.au

The Solar Homes Program solar PV rebate assists eligible Victorian landlords and renters to install solar PV panels. 

A rebate of up to $1,850 for eligible landlords to reduce the cost of installing a solar panel system on a maximum of 2 rental properties each financial year, subject to a Solar Homes Landlord-Tenant Agreement being signed.

Landlords can further reduce their upfront cost even further by applying for an interest-free loan to match the rebate amount.

Only one application is available per address. However, landlords can apply for up to 2 rental properties in a financial year provided all the eligibility criteria are met.


Depreciation of solar panels

By Installing a “new” solar array at your rental property you can increase your tax deductions and potentially increase your cash flow.  Not only are solar panels attractive to tenants, solar systems are classified as a plant and equipment item, Division 40, and you are entitled to claim the property depreciation tax deduction.  

If you are a small business owner or a sole trader make use of the small business instant asset write-off provisions. Click here for further information.

A solar panel system can generate great rental property depreciation deductions for you. The below table outlines the cost of a solar panel system and what property depreciation deductions are claimable:  

solar panels tax depreciation table results

How do you claim for property depreciation?

You will need to organise a residential or a commercial depreciation schedule from a qualified quantity surveyor. Here at Capital Claims Tax Depreciation, the team will assess your residential property and provide you a personalised quote and estimate of what you can expect to receive in or our expert commercial team will assess your commercial property and provide a personalised fee proposal.

Our depreciation schedules are generally considered a one-off investment that could potentially save you thousands every financial year. Your schedule will start from your settlement date and project forward for the next 40 years, during which time you can make annual claims against the income being produced.

Get in touch today! Call us on 1300 922 220 or click here if you would like to know more about claiming property depreciation.

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.

View all posts by Mark Wilkins

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