The following cost breakdown shows Luke’s cash position with and without depreciation in his first year of owning the property.
According to his Duo Tax depreciation schedule, Luke could claim $16,300 depreciation in his first year.
Luke’s numbers without a depreciation claim
Luke’s numbers with a depreciation claim of $6,031
Without depreciation, Luke had to pay $90 out of his own pocket each week. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, Luke went from covering the loss to actually generating $26 each week.
This means that Duo Tax was able to save Luke a total of $6,031 in his first year of owning the investment property.
The great thing about his depreciation schedule is that it’s valid for up to 40 years! So, Luke can continue saving money each year, as long as he continues to own the property.
Our Duo Tax Rental Property Depreciation Calculator is free, so make sure to check it out!