If you own a rental property, or investment property the Australian Tax Office allows you to claim depreciation as an expense against that property.
The newer the property, the more depreciation you can claim. The rates are defined by the ATO and set out a Depreciation schedule.

depreciation investment property ato

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construction costs of buildings and other capital works and structural improvements This includes such items as hot water systems, carpets, blinds, ovens, cook tops, range hoods, garage door motors, door closers, free standing furniture, air conditioning ect.
Depreciation of rental property falls into two categories.

Plant and equipment, which are items that can be easily removed
from your property, rather than being permanently fixed structure of the building.

These items are written of for depreciation over their estimated useful life, at rates pre-determined by the ATO.
The second category of depreciation is known as capital works deduction, also known as division 43 or building write off.

normal wear and tear and depreciation rental property

This includes all structural elements of the building, including all items that are fixed to the structure. This includes such materials as bricks, mortar, plaster walls, flooring, wiring, and other items that are not easily removed from the building, such as doors, tiles, windows, toilets and guttering, . The tax office allows all of these items to be written off at a rate of 2% per year.


Claiming Building Works Deductions Against rental Property income For Investment Property

Watch this video for an explanation on the obligations of those who earn income from a rental or investment property, and how to offset your capital deductions for renovations, repairs and improvements.


It is important when considering writing off depreciation against your rental property that you use the services of a qualified professional. Quantity surveyors are qualified under tax legislation and their depreciation reports are accepted by the Australian taxation Office (ATO).

The cost of a quantity surveyor on a normal rental property ranges from about $500 – $750. It is important to remember also that the cost of using a quantity surveyor is tax deductible in the year in which they are used.

Depreciation can be an attractive feature and should be considered with the other financial implications when deciding whether to purchase an Investment property, or to stat renting out your home.

investors-claim-loss-of-asset-value-on-tax how-do-i-set-up-a-depreciation-schedule-for-rental-property

This Audio File Explains How Depreciation Can Be Claimed Against A Rental Property To Reduce Tax Payable And Increase Your Return


Visit our How It Works page and follow the steps to lodge your tax online now.