How do I use the depreciation calculator to calculate my depreciation amount?
Frequently Asked Questions:
The calculator will calculate the depreciation estimate based on a series of data points from our comprehensive database and compare this with similar properties to give you an approximate depreciation value for your investment property.
The ATO prescribes two methods to calculate depreciation.
1. The Prime Cost (straight line) Depreciation Method
Under the prime cost method, also known as the straight-line depreciation, you calculate the decrease in value of an asset over its effective life at a fixed rate each year.
2. The Diminishing Value Method
Under the diminishing value method, also known as the declining balance depreciation method, you claim depreciation at a higher depreciation rate in the early years of ownership of the property. As a result, the depreciation deduction value will decrease each year until the asset value runs out. You can also increase the claim on items valued below $1,000 using low-value pooling.
The asset calculator uses both the diminishing value and prime cost method to give you an estimate of what you can claim on a depreciating asset, construction costs or capital allowance.
It’s important to understand that these are only estimates for your investment property’s capital works allowance and plant and equipment assets. So, the final claimable depreciation amount is subject to change.
