Transforming Cashflow on a New Apartment Purchased for $675,000
The Numbers: Martha’s Investment Property
Type of Purchase
While Martha wasn’t able to claim deductions for the depreciation on the property’s existing plant and equipment (Division 40 assets) due to living in the property before renting it out, she claimed significant depreciation on the property’s capital works (Division 43) deductions. This was due to her purchasing a new property.
Without Depreciation vs With Depreciation Services
The following cost breakdown shows Martha’s cash position with and without depreciation in her first year of owning the property.
According to her Duo Tax depreciation schedule, Martha was open to claiming $9,800 depreciation in her first year of ownership.
Martha’s numbers without a depreciation claim
Martha’s numbers with a depreciation claim of $9,800
Without depreciation, Martha had to pay $109 out of her own pocket each week. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, Martha reduced that weekly payment by $70 per week.
This means that Duo Tax was able to save Martha a total of $3,626 in her first year of owning the investment property.
The best part about her depreciation schedule is that it remains valid for up to 40 years. This allows Martha to continue saving money annually, as long as she continues to carry ownership of 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.