Case Study

Brand New Office Purchased for $1,900,000

By ordering a Duo Tax depreciation schedule and claiming depreciation on his new office space, Blake could significantly increase his investment income and boost his cash flow position.
He ended up saving $24,600 in his second year of owning the property!
Here's how.

The Numbers: Blake’s Investment Property

Here are some figures regarding Blake’s investment property:
Purchase Type
He purchased a 400 square meter office space within a building complex for $1,900,000 last year and rented it out immediately,
Rent
His yearly rental amounted to $137,280 per year - which is a weekly rental of $2,640,
Expenses
The office space expenses amounted to $107,496, covering his 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 Blake can claim depreciation on the plant and equipment (Division 40) assets that he owns and the offices’ capital works (Division 43) deductions

Without Depreciation vs With Depreciation Services

The following cost breakdown shows Blake’s cash position with and without depreciation in his second year of owning the office space. 

According to his Duo Tax depreciation schedule, Blake could claim $54,800 depreciation in his first year. 

A brand new office space purchased for $1,900,000

Blake’s numbers without a depreciation claim

Annual Income
($2,640 x 52 weeks)
$137,280
Annual Expenses
$107,496
Pre-tax: Net Income
Income minus expenses: $137,280 - $107,496)
$29,784
Total Tax Payable
$13,403
Tax Refund
(tax loss x 37% tax rate)
$0
Annual Income from the Investment Property
[net income + tax payable: $13,403 - $0]
$16,381
Weekly income
$315

Blake’s numbers with a depreciation claim of $54,800

Annual Income
($2,640 x 52 weeks)
$137,280
Annual Expenses
$107,496
Pre-tax: Net Income
Income minus expenses: $137,280 - $107,496)
$29,784
Total Taxation Loss
[net income + depreciation: ($29,784) + ($54,800)]
-$25,016
Tax Refund
(tax loss x 37% tax rate)
$11,257
Annual Costs of the Investment Property
Total taxation loss [net income + depreciation: ($29,784) + ($11,257)]
$41,041
Weekly loss
$789
Difference of $474 per week/$24,660 per year

Without depreciation, Blake was only generating $315 of profit from his office space investment. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, he started generating $789 each week - which is $474 more than before his depreciation claim.

This means that Duo Tax was able to save Blake a total of $24,660 in his second year of owning the office space. 

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

Here’s How Much You Could Be Claiming

As you can see from Blake’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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