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Case Study

Brand New Office Purchased for $504,000

By ordering a Duo Tax depreciation schedule and claiming depreciation on his new office space, Noah could significantly increase his investment income and boost his cash flow position.
He ended up saving $5,587 in his first year of owning the property!
Here's how.

The Numbers: Noah’s Investment Property

Here are some figures regarding Noah’s investment property:
Purchase Type
he purchased a small office space within a building complex for $504,000 two years ago and rented it out immediately,
Rent
his yearly rental amounted to $45,760 per year - which is a weekly rental of $880,
Expenses
the office space expenses amounted to $41,210, 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 Noah 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 Noah’s cash position with and without depreciation in his second year of owning the office space. 

According to his Duo Tax depreciation schedule, Noah could claim $15,100 depreciation in his first year. 

A brand new office space purchased for $504,000

Noah’s numbers without a depreciation claim

Annual Income
($880 x 52 weeks)
$45,760
Annual Expenses
$41,210
Pre-tax: Net Income
Income minus expenses: $45,760 - $41,210)
$4,550
Total taxation loss
$1,684
Tax Refund
(tax loss x 37% tax rate)
$0
Annual costs of the investment property
[net income + tax refund: ($1,684) + $0]
$2,867
Weekly income
$55

Noah’s numbers with a depreciation claim of $15,100

Annual Income
($880 x 52 weeks)
$45,760
Annual Expenses
$41,210
Pre-tax: Net Income
Income minus expenses: $45,760 - $41,210)
$4,550
Total taxation loss
[net income + depreciation: ($4,550) + ($15,100)]
-$10,550
Tax Refund
(tax loss x 37% tax rate)
$3,904
Annual costs of the investment property
Total taxation loss [net income + depreciation: ($4,550) + ($3,904)]
$8,454
Weekly income
$163
Difference of $107 per week/ $5,587 per year

Without depreciation, Noah was only generating $55 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 $163 each week - which is $107 more than before his depreciation claim.

This means that Duo Tax was able to save Noah a total of $5,587 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, Noah 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 Noah’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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