Investment Property Owners  – Maximise Your Deductions

Investment Property Owners  – Maximise Your Deductions


Property Tax Depreciation – What is it, and how does it help me as an investor?

In general, Depreciation refers to the loss of value of an asset over time. Tax Depreciation is the term used when that asset is used for income-generating purposes as the eligible amount of deductions reduces the owner’s taxable income.

As you can guess, Property Tax Depreciation is the “loss of value” or “wear and tear” of an investment property that can be claimed as a tax deduction.

This amount can be deducted from the owner’s taxable income each year that the property is owned by them whilst generating a taxable income

Owners of either commercial or residential investment properties may be eligible to claim Depreciation. Short-term holiday accommodation premises may also qualify.

The tax depreciation report details the deductions you can claim each year you own the property. This ATO-compliant document allows you or your accountant to reduce your taxable income by the amount allocated to that specific Financial Year.

Following ATO guidelines, two components, Division 40 (Plant & Equipment items) & Division 43 (Structural aspects) are assessed when a depreciation report is being prepared for a property. It is important to note that not all ownership types or properties will qualify for deductions against the abovementioned components.

Tax depreciation benefits are highest on brand new properties.

See the simplified example below to demonstrate how claiming Depreciation benefits an investor.

If the depreciation report for my property shows a deduction of $15,000 for the 2022/2023 Financial Year,  my taxable income for that year is reduced by $15,000.




How much can you claim any depreciation deductions for your investment property?

It is FREE to check for CJ Investiment clients!

CJ Investiments clients have free access to Washington Brown Depreciation’s exclusive property tax depreciation calculator – Use this tool to see the likely deductions available for your property.

Alternatively, contact the team at CJ Investiments or submit a request here to find out more about Depreciation or to ask any property-specific questions.


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