A Townhouse Built Before 1987 Purchased for $412,000
The Numbers: Lara’s Investment Property
Type of Purchase
While Lara purchased an older property, the previous owners renovated the kitchen and bathroom and installed new blinds and floor coverings before selling it. This means Lara can claim deductions for the depreciation on the property’s plant and equipment (Division 40 assets).
Lara can also claim deductions for the property’s capital wors (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 Lara’s cash position with and without depreciation in her first year of owning the property.
According to her Duo Tax depreciation schedule, Lara could claim $5,400 in depreciation in her first year.
Lara’s numbers without a depreciation claim
Lara’s numbers with a depreciation claim of $5,400
Without depreciation, Lara would’ve had to pay $2 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 $37 per week in rental income from the property.
From here, Duo Tax was able to save Lara a total of $1,998 in her first year of owning the investment property.
The great thing about her depreciation schedule is that it’s valid for up to 40 years! So, Lara can continue saving money each year as long as she 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.