A House Built In 1992 Purchased for $750,000
The Numbers: Joe’s Investment Property
Type of Purchase
Rent
Expenses
Despite property investors no longer being allowed to claim tax deductions for Division 40 assets (plant and equipment), Joe leased out his house prior to the legislation changes in 2017 – meaning he can still claim depreciation over the life of these assets. In consideration the property was just built in 1992, Joe can claim on both Division 43 (capital works) on the minor renovations that the previous owner did plus the original construction cost to the property.
Without Depreciation vs With Depreciation Services
Based on the depreciation schedule prepared for the property, Joe was able to claim the following deductions in the first full financial year:
- Plant and Equipment (Division 40): $1,500
- Additional Capital Works deductions from renovations: $1,750
- Original Capital Works deductions: $2,500
In total, Joe’s depreciation deductions for the first year amounted to $5,750.
Joe’s numbers without a depreciation claim
Joe’s numbers with a depreciation claim of 5,750
Without claiming depreciation, Joe’s investment property would have had a weekly shortfall of around $12. However, by claiming the $6,762 in depreciation deductions, he was able to enter a positive cashflow, with a positive weekly yield of $68 and a difference of $80.
Duo Tax saved Joe a total of $4,160 per year in his first year of claiming tax depreciation on his 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.
Obtain your tax depreciation schedule in 3 easy steps.
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