Case Study

A Warehouse Built in 2006 for $450,000

By ordering a Duo Tax depreciation schedule and claiming depreciation on a warehouse built in 2006 that she purchased last year, Michaela could significantly increase her investment income and boost her cash flow position.
She ended up saving $4,514 in her first year of owning the property!
Here's how.

The Numbers: Michaela’s Investment Property

Here are some figures regarding Michaela’s investment property:
Purchase Type
She purchased a warehouse in 2021 with a small ground-level office,
Rent
She secured tenants immediately who currently pay $640 rental per week - which is $33,280 per year, and
Expenses
The warehouse expenses amounted to $32,866, covering her interest repayments, management fees, rates and maintenance.

Commercial property owners can claim depreciation deductions for the building’s structure as well as any assets they own within their property. So Michaela can claim depreciation on the plant and equipment (Division 40) assets that she owns and the offices’ capital works (Division 43) deductions

Without Depreciation vs With Depreciation Services

The following cost breakdown shows Michaela’s cash position with and without depreciation in her first year of owning the warehouse. 

According to her Duo Tax depreciation schedule, Michaela could claim $12,200 depreciation in her first year. 

A warehouse built in 2006 and purchased last year for $450,000

Michaela’s numbers without a depreciation claim

Annual Income
($640 x 52 weeks)
$33,280
Annual Expenses
$32,866
Pre-tax: Net Income
Income minus expenses: $33,280 - $32,866)
$414
Total Tax Payable
$153
Tax Refund
(tax loss x 37% tax rate)
$0
Annual Income from the Investment Property
[net income + tax payable: $153 - $0]
$261
Weekly income
$5

Michaela’s numbers with a depreciation claim of $12,200

Annual Income
($640 x 52 weeks)
$33,280
Annual Expenses
$32,866
Pre-tax: Net Income
Income minus expenses: $33,280 - $32,866)
$414
Total Taxation Loss
[net income + depreciation: ($414) + ($12,200)]
-$11,786
Tax Refund
(tax loss x 37% tax rate)
$4,361
Annual Costs of the Investment Property
Total taxation loss [net income + depreciation: ($414) + ($4,361)]
$4,775
Weekly income
$92
Difference of $87 per week/$4,524 per year

Without depreciation, Michaela was only generating $5 of weekly profit from her warehouse investment. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, she started generating $92 each week – which is $87 more than before her depreciation claim.

This means that Duo Tax was able to save Michaela a total of $4,524 in the first year of owning the warehouse. 

The great thing about her depreciation schedule is that it’s valid for up to 40 years! So, Michaela can continue saving money each year, as long as he continues to own the warehouse.

Here’s How Much You Could Be Claiming

As you can see from Michaela’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.

Our Duo Tax Rental Property Depreciation Calculator is free, so make sure to check it out!

Organise Your Depreciation Schedule Today!

Step 1

Qualify your Property

Call us and we will ask you a few simple questions to qualify your investment property.
Call 1300 185 498
Step 2

Order a Tax Depreciation Schedule

Order over the phone or via our online form and we will begin preparing your depreciation schedule.Call us and we will ask you a few simple questions to qualify your investment property.
Order Here
Step 3

Claim Maximum Deductions

Within approx. 5-10 business days your personalised report will be delivered to you and your accountant.
View Sample Report

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