An Apartment Built Before 1987 Purchased for $362,000
The Numbers: Declan’s Investment Property
Type of Purchase
While Declan purchased an older property, the previous owners renovated the kitchen and bathroom and installed new blinds and floor coverings before selling it, permitting Declan to claim deductions for the depreciation on the property’s plant and equipment (Division 40 assets).
Declan can also claim deductions for the property’s capital works (Division 43) deductions, including the cost of the renovations in the kitchen and bathroom.
Without Depreciation vs With Depreciation Services
The following cost breakdown shows Declan’s cash position with and without depreciation in his first year of owning the property.
According to his Duo Tax depreciation schedule, Declan could claim $4,800 in depreciation in his first year.
Declan’s numbers without a depreciation claim
Declan’s numbers with a depreciation claim of $4,800
Without depreciation, Declan would’ve had to pay $22 out of his own pocket each week. Fortunately, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, he started generating $12 per week in rental income from the property.
This means that Duo Tax could save Declan a total of $1,776 in his first year of owning the investment property.
The great thing about his depreciation schedule is that it’s valid for up to 40 years! So, Declan can continue saving money each year, as long as he owns 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.