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Case Study

An Apartment Purchased in 2010 for $415,000

By ordering a Duo Tax depreciation schedule and claiming depreciation on an apartment Emily recently turned into an investment property, she went from being in a significant negative cash flow position to a manageable negative cash flow position.
In fact, Emily saved $1,776 in her first year of owning the property!
Here's how.

The Numbers: Emily’s Investment Property

Here are some figures regarding Emily’s investment property:
Purchase Type
She purchased an apartment in 2010 for $415,000 and started renting it out in 2021
Rent
Her yearly rental amounted to $19,760 per year – which is a weekly rental of $380
Expenses
The property’s expenses amounted to $23,686, covering her interest repayments, management fees, rates and maintenance.

While Emily wasn’t able to claim deductions for the depreciation on the property’s existing plant and equipment (Division 40 assets), she was able to claim depreciation on the property’s capital works (Division 43) deductions

Without Depreciation vs With Depreciation Services

The following cost breakdown shows Emily’s cash position with and without depreciation in her first year of turning the apartment into an investment property. 

According to her Duo Tax depreciation schedule, Emily could claim $4,800 depreciation in her first year. 

An apartment purchased in 2010 for $415,00

Emily’s numbers without a depreciation claim

Annual Income
($380 x 52 weeks)
$19,760
Annual Expenses
$23,686
Pre-tax: Net Income
Income minus expenses: $19,760 - $23,686)
-$3,926
Total Taxation Loss
-$3,926
Tax Refund
(tax loss x 37% tax rate)
$1,453
Annual Costs of the Investment Property
[net income + tax refund: (-$3,926) + $1,453]
-$2,473
Weekly loss
-$48

Emily’s numbers with a depreciation claim of $4,800

Annual Income
($380 x 52 weeks)
$19,760
Annual Expenses
$23,686
Pre-tax: Net Income
Income minus expenses: $19,760 - $23,686)
-$3,926
Total Taxation Loss
[net income + depreciation: (-$3,926) + ($4,800)]
-$8,726
Tax Refund
(tax loss x 37% tax rate)
$3,229
Annual Costs of the Investment Property
Total taxation loss [net income + depreciation: (-$3,926) + ($3,229)]
-$697
Weekly loss
-$13
Difference of $34 per week/ $1,776 per year

Without depreciation, Emily had to pay $48 out of her own pocket each week. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, Emily reduced that weekly payment by $13 per week. 

This means that Duo Tax was able to save Emily a total of $1,776 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, Emily can continue saving money each year, as long as she continues to own the property.

Here’s How Much You Could Be Claiming

As you can see from Emily’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.
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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