Case Study

A Townhouse Built Before 1987 Purchased for $412,000

After purchasing a townhouse built before 1987, Lara used the Duo Tax depreciation schedule and claimed depreciation on her investment property. As a result, Lara transitioned from being in a negative cash flow position to generating a small weekly profit from the rental property.
In other words, Lara no longer had to pay out-of-pocket for any expenses as she was now saving $1,998 in her first year of claiming tax deductions for depreciation.
Here's how.
A Townhouse Built Before 1987 Purchased for $412,000

The Numbers: Lara’s Investment Property

Here are some figures regarding Lara’s investment property:

Type of Purchase

She purchased a townhouse originally built before 1987 for $412,000 last year and rented it out immediately.


Her yearly rental amounted to $23,400 —a weekly rental of $450.


The property’s expenses amounted to $23,540, covering her interest repayments, management fees, rates and maintenance.

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.

A Townhouse Built Before 1987 bought for $412,000

Lara’s numbers without a depreciation claim

Annual Rental Income
$450 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $23,400 - $23,540
Total Taxation Loss With No Depreciation
Tax Refund
Tax loss x tax rate: -$140 x 37%
Annual Costs of the Investment Property
Net income + tax refund: (-$140) + $52
Weekly loss

Lara’s numbers with a depreciation claim of $5,400

Annual Rental Income
$450 x 52 weeks
Annual Property Expenses
Net Income (Pre-tax)
Income minus expenses: $23,400 - $23,540
Total Taxation Loss With Depreciation
Net income + depreciation: (-$140) + ($5,400)
Tax Refund
Total Taxation Loss x Tax Rate: -$5,540 x 37%
Annual Income from the Investment Property
Net Income + Tax refund: (-$140) + ($2,050)
Weekly income
Difference of $38 per week / $1,998 per year

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

As you can see from Lara’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
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Step 2
Order a 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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