Did you know your investment property can earn you tax deductions without spending an extra dollar?
It’s called depreciation. And if you own a brand-new investment property without a depreciation schedule, you’re very likely leaving thousands on the table every year.
Here’s the simple version:
Buildings and fittings wear out over time, and the tax office lets you claim that as a deduction. It is recognised as a business expense. There are two types, the building itself (claimed at 2.5% per year for 40 years), and the items inside like ovens, carpets and hot water systems.
The catch? Since 2017, investors buying established property generally can’t claim depreciation on items already inside. But buy brand new, and you claim everything, at full value, from day one, one of the biggest financial advantages new property has over established.
Take Emma: her brand new $650,000 property delivered around $12,000 in first-year deductions, putting roughly $4,000 back in her pocket at tax time. Over 10 years, her schedule totals more than $80,000.
A depreciation schedule is a one-off report from a quantity surveyor, costing $600–$800 (itself tax deductible), and typically pays for itself in year one.
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