A 10-Year-Old House Purchased for $490,000
The Numbers: Skye’s Investment Property
Type of Purchase
Skye can claim deductions for the depreciation on the property’s plant and equipment (Division 40 assets) and the property’s capital works (Division 43) deductions because the second-hand property depreciation rules regarding division 40 assets were only amended in 2017. The new rules only apply to property purchased after the 9th of May 2017 at 7:30 pm.
Without Depreciation vs With Depreciation Services
The following cost breakdown shows Skye’s cash position with and without depreciation in her first year of owning the property.
According to her Duo Tax depreciation schedule, Skye could claim $11,400 depreciation in her first year.
Skye’s numbers without a depreciation claim
Skye’s numbers with a depreciation claim of $11,400
Without depreciation, Skye had to pay $22 out of her own pocket each week. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, Skye was able to start generating $59 of income per week, so she was no longer paying out-of-pocket.
This means that Duo Tax was able to save Skye a total of $4,218 in her first year of owning the investment property.
The great thing about her depreciation schedule is that it’s valid for up to 40 years! So, Skye can continue saving money each year, as long as she continues to own the property.
Here’s How Much You Could Be Claiming
However, if you’re still feeling unsure about committing to ordering a depreciation schedule, we have designed a tax depreciation calculator to help you estimate what you could potentially claim on tax depreciation.
This is an accounting tool designed to help estimate and calculate the declining value of capital works and plant and equipment assets and relies on accurate figures to present accurate estimations.