Case Study

Generating Positive Cash Flow on a 10-Year-Old Townhouse

Taylor purchased a townhouse in 2012 and rented it out immediately. Unfortunately, like so many other investors, she has been missing out on claiming a tax deduction for her property’s depreciation over the years.
Thankfully, even older properties can benefit from depreciation deductions, so it wasn’t too late for her to reach out to the Duo Tax team to get a depreciation schedule. Her goal was to hopefully turn her negative cash flow position into a positive one. And she succeeded with her $10,600 depreciation claim!
Here's how.
A 10-Year-Old Townhouse

The Numbers: Taylor’s Investment Property

Here are some figures regarding Taylor’s investment property:

Type of Purchase

She purchased the property in 2012 for $355,000 and rented it out immediately.


Her yearly rent amounted to $19,240 per year, which is a weekly rental of $370.


The property’s expenses amounted to $20,768, covering her interest repayments, management fees, rates, and maintenance.

While property investors are no longer allowed to claim tax deductions for plant and equipment depreciation (Division 40 assets), Taylor leased out her property  prior to the legislation changes in 2017, which means she can continue to claim depreciation over the useful life of these assets. She can also claim depreciation on the property’s capital works (Division 43) deductions

Without Depreciation vs With Depreciation Services

The following cost breakdown shows Taylor’s cash flow position before and after she started claiming a tax deduction for her investment property’s depreciation. 

According to her Duo Tax depreciation schedule, Taylor could claim $10,600 depreciation.

A 10-year-old townhouse purchased for $355,000

Taylor’s numbers without a depreciation claim

Annual Rental Income
$370 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $19,240 - $20,768
Total Taxation Loss With No Depreciation
Tax Refund
Tax loss x tax rate: -$1,528 x 37%
Annual Costs of the Investment Property
Net income + tax refund: (-$1,528) + $565
Weekly loss

Taylor’s numbers with a depreciation claim of $10,600

Annual Rental Income
$370 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $19,240 - $20,768
Total Taxation Loss With Depreciation
Net income + depreciation: (-$1,528) + ($10,600)
Tax Refund
Total Taxation Loss x Tax Rate: -$12,128 x 37%
Annual Income from the Investment Property
Net Income + Tax refund: (-$1,528) + ($4,487)
Weekly income
Difference of $75 per week / $3,922 per year

Without her depreciation claim, Taylor had to pay $19 out of her own pocket each week. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, she actually started generating income from the property for the first time since she owned it. 

Duo Tax saved Taylor a total of $3,922 in her first year of turning her property into an investment.

The great thing about her depreciation schedule is that it’s valid for up to 40 years. Taylor can continue to save money each year as long as she continues to own the property.

Here’s How Much You Could Be Claiming

As you can see from Taylor’s scenario, tax depreciation schedules can make a significant difference in an investor’s cash flow each year.

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.
Rental Property Depreciation Calculator

Obtain your tax depreciation schedule in 3 easy steps.

Step 1
Qualify your Property
Call us and we will ask you a few simple questions to qualify your investment property.
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Step 2
Order a Report
Order over the phone or via our online form and we will begin preparing your report.
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Step 3
Claim Maximum Deductions
Within approx. 5 business days your report will be delivered to you and your accountant.
View Sample Report

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