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Case Study

An Existing Granny Flat Purchased with 10-Year-Old Property

By ordering a Duo Tax depreciation schedule and claiming depreciation on the granny flat, Evelyn went from generating under $100 weekly income to generating over $100 weekly income.
She saved $1,036 in her first year of owning the property!
Here's how.

The Numbers: Evelyn’s Granny Flat Property

Here are some figures regarding Evelyn’s investment property:
Purchase Type
she bought a house with an existing granny flat one year ago and rented it out immediately,
Rent
her yearly rental amounted to $18,200 per year - which is a weekly rental of $350,
Expenses
the property’s expenses amounted to $11,468, covering her interest repayments, management fees, rates and maintenance.

While Evelyn 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 Evelyn’s cash position with and without depreciation in her first year of owning the property. 

According to her Duo Tax depreciation schedule, Evelyn could claim $2,800 in depreciation in her first year. 

A house purchased with an existing granny flat

Evelyn’s numbers without a depreciation claim

Annual Income
($350 x 52 weeks)
$18,200
Annual Expenses
$11,468
Pre-tax: Net Income
Income minus expenses: $18,200 - $11,468)
$6,732
Net Income
$6,732
Tax Payable
(net income x 37% tax rate)
$2,491
Annual Income from the Investment Property
[net income + tax payable: $6,732 - $2,491]
$4,241
Weekly income
$82

Evelyn’s numbers with a depreciation claim of $2,800

Annual Income
($350 x 52 weeks)
$18,200
Annual Expenses
$11,468
Pre-tax: Net Income
Income minus expenses: $18,200 - $11,468)
$6,732
Net Income
[net income - depreciation: $6,732 - $2,800]
$3,932
Tax Payable
(net income x 37% tax rate)
$1,455
Annual Income from the Investment Property
[net income - tax payable: $6,732 - $1,455]
$5,277
Weekly income
$101
Difference of $19 per week/ $1,036 per year

Without depreciation, Evelyn was only generating $82 of profit from the existing granny flat. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, she started generating $101 each week - which is $19 more than before her depreciation claim.

This means that Duo Tax saved Evelyn a total of $1,036 in her first year of owning the granny flat. 

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