A Depreciation Schedule effectively reduces your taxable income.
Similar to how you are able to claim wear and tear on a vehicle purchased for business purposes, you can also claim the depreciation of your investment property against your taxable income.
Common claim examples include a Capital Works deduction, which allows you to write off the construction costs over a period of 40 years (the expected life of the building), and depreciation on the wear and tear of common items such as fixtures and fittings.
Using a Quantity Surveyor
If your residential property was built after 1985, your Accountant is not permitted to estimate the construction costs. The Australian Taxation Office (ATO) has identified Quantity Surveyors as properly qualified to make the appropriate estimate of the construction costs, where those costs are unknown.
A trained Quantity Surveyor will ensure all depreciable items are noted and photographed. This guarantees you won’t miss out on any deductions. The documentation can then be used as evidence in the event of an audit.