We are still operating as usual with all COVID safety measures in place.
Learn more
Close

Case Study

Brand New Warehouse Built for $1,870,000

By ordering a Duo Tax depreciation schedule and claiming depreciation on his new warehouse, Steve could significantly increase his investment income and boost his cash flow position.
He ended up saving $16,830 in his first year of owning the property!
Here's how.

The Numbers: Steve’s Investment Property

Here are some figures regarding Steve’s investment property:
Purchase Type
he built a warehouse in 2017 with a high quality upstairs office area with timber floor coverings, ducted air conditioning, a kitchenette area and a bathroom,
Rent
he secured tenants immediately who currently pay $1,830 rental per week - which is $95,160 per year, and
Expenses
the warehouse expenses amounted to $86,037, 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 Steve 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 Steve’s cash position with and without depreciation in his first year of owning the warehouse. 

According to his Duo Tax depreciation schedule, Steve could claim $37,400 depreciation in his first year. 

A brand new warehouse built for $1,870,00

Steve’s numbers without a depreciation claim

Annual Income
($420 x 52 weeks)
$95,160
Annual Expenses
$86,037
Pre-tax: Net Income
Income minus expenses: $95,160 - $86,037)
$9,123
Total Taxation Loss
$4,105
Tax Refund
(tax loss x 37% tax rate)
$0
Annual Costs of the Investment Property
[net income + tax refund: ($4,105) + $0]
$5,018
Weekly income
$96

Steve’s numbers with a depreciation claim of $16,830

Annual Income
($420 x 52 weeks)
$95,160
Annual Expenses
$86,037
Pre-tax: Net Income
Income minus expenses: $95,160 - $86,037)
$9,123
Total Taxation Loss
[net income + depreciation: ($9,123) + ($16,830)]
-$28,277
Tax Refund
(tax loss x 37% tax rate)
$12,725
Annual Costs of the Investment Property
Total taxation loss [net income + depreciation: ($9,123) + ($12,725)]
$21,848
Weekly income
$420
Difference of $324 per week/ $16,830 per year

Without depreciation, Steve was only generating $96 of weekly profit from his warehouse investment. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, he started generating $420 each week - which is $324 more than before his depreciation claim.

This means that Duo Tax was able to save Steve a total of $16,830 in the first year of owning the warehouse. 

The great thing about his depreciation schedule is that it’s valid for up to 40 years! So, Steve 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 Steve’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

Get in Touch.

Privacy Policy