Case Study

Reducing Negative Cash Flow on a 10-Year-Old Townhouse

After purchasing her townhouse for $700,000, homeowner Lily ordered a Duo Tax depreciation schedule and claimed depreciation on her investment property. As a result, Lily transitioned from being in a significant negative cash flow position to a far more manageable one.
In other words, while she still had to pay some out-of-pocket expenses, the amount was significantly reduced – she saved $2,479 in her first year of claiming property tax depreciation!
Here's how.
A 10-Year-Old Townhouse

The Numbers: Lily’s Investment Property

Here are some figures regarding Lily’s investment property:

Type of Purchase

She purchased the property in 2021 for $700,000 and rented it out immediately.


Her yearly rental amounted to $27,560 per year, which is a weekly rental of $530.


The property’s expenses amounted to $37,500, covering her interest repayments, management fees, rates and maintenance.

While Lily couldn’t claim deductions for the depreciation on the property’s existing plant and equipment (Division 40 assets), she was able to claim depreciation on the property’s capital works (Division 43) deductions.

Without Depreciation vs With Depreciation Services

The following cost breakdown shows Lily’s cash position with and without depreciation in her first year of owning the property. 

According to her Duo Tax depreciation schedule, Lily could claim $6,700 depreciation in her first year of using the property as an investment.

A 10-year-old house purchased for $700,000

Lily’s numbers without a depreciation claim

Annual Rental Income
$530 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $27,560 - $37,500
Total Taxation Loss With No Depreciation
Tax Refund
Tax loss x tax rate: -$9,940 x 37%
Annual Costs of the Investment Property
Net income + tax refund: (-$9,940) + $3,678
Weekly loss

Lily’s numbers with a depreciation claim of $6,700

Annual Rental Income
$530 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $27,560 - $37,500
Total Taxation Loss With Depreciation
Net income + depreciation: (-$9,940) + ($6,700)
Tax Refund
Total Taxation Loss x Tax Rate: -$16,640 x 37%
Annual Costs of the Investment Property
Net Income + Tax refund: (-$9,940) + ($6,157)
Weekly loss
Difference of $48 per week / $2,479 per year

Without depreciation, Lily had to pay $120 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 reduced her out-of-pocket expense to just $73 per week.

Duo Tax saved Lily a total of $2,479 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. Lily can continue saving 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 Lily’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.
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