The following cost breakdown shows Charlotte’s cash position with and without depreciation in her first year of owning the property.
According to her Duo Tax depreciation schedule, Charlotte could claim $7,300 in depreciation in her first year.
Charlotte’s numbers without a depreciation claim
Charlotte’s numbers with a depreciation claim of $3,151
Without depreciation, Charlotte was only generating $84 of profit from her newly built granny flat. However, by taking advantage of the Australian Tax Office’s tax breaks and making a depreciation claim, she started generating $136 each week - which is $52 more than before her depreciation claim.
This means that Duo Tax saved Charlotte a total of $3,151 in her first year after building her granny flat.
The great thing about her depreciation schedule is that it’s valid for up to 40 years! So, Charlotte can continue saving money each year as long as she continues to own the property.
Our Duo Tax Rental Property Depreciation Calculator is free, so make sure to check it out!