What is Depreciation?

Under income tax law you are allowed to claim deductions for expenses incurred in earning assessable income, eg. rent. The cost associated with the acquisition of capital assets (the house, or associated plant), which provide benefit over their ‘effective life’ may be written off over a period of time as tax deductions and this is essentially known as depreciation.

It is a common misunderstanding that an accountant can prepare a 'depreciation schedule', however the ATO specifically states that 'Accountants, Solicitors, Real Estate Agents and Valuers are NOT recognised to estimate construction costs for depreciation purposes (TR 97/25)

To ensure you are claiming all the associated expenses related to depreciation of your rental property we highly recommend that you obtain a Tax Depreciation Schedule. It can be the difference in thousands of dollars of deductions per annum.

What is a Tax Depreciation Schedule?

A Tax Depreciation Schedule is a professionally produced document highlighting items of plant, equipment and capital costs that may be depreciated. It incorporates the value of each depreciable item, including delivery costs, installation costs and the cost associated with bringing the plant into full operation.

For more information on tax depreciation schedules, please visit;

BMT & Assoc Quantity Surveyors www.bmtqs.com.au

Depreciator www.depreciator.com.au here you can download a free e-book.


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