Reducing Negative Cash Flow on a 10-Year-Old Townhouse
The Numbers: Lily’s Investment Property
Type of Purchase
Rent
Expenses
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.
Lily’s numbers without a depreciation claim
Lily’s numbers with a depreciation claim of $6,700
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
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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