Understanding Tax Depreciation Schedules
A tax depreciation schedule is a vital tool for property investors, meticulously detailing the depreciation deductions on a property’s components, such as the building itself and its fixtures and fittings. This document is a cornerstone for maximising the cash returns from your investment property or business annually.
ACP Quantity Surveyors specialise in crafting these schedules, ensuring that you fully leverage the depreciation deductions over the life of your property.
The Benefits Unveiled
Engaging ACP Quantity Surveyors to prepare your tax depreciation schedule unlocks several financial advantages. It significantly enhances your tax deductions, directly improving your property’s cash flow. This improvement in cash flow transforms your property into a more financially viable investment.
Compliance with Australian Taxation Office (ATO) regulations is assured, safeguarding you against potential risks. Furthermore, a tax depreciation schedule offers clarity in your long-term financial planning, outlining future depreciation claims to inform your investment strategy.
Inclusions in ACP’s Tax Depreciation Schedules
Our schedules at ACP Quantity Surveyors are comprehensive and detailed. We conduct a thorough examination of all depreciable elements of your property. Our schedules are informed by the latest ATO rates and methods, covering both plant and equipment deductions (Division 40) and capital works deductions (Division 43).
We pride ourselves on delivering these complex details in a clear, concise, and customised format, ensuring you can easily lodge them with your tax returns.
Real-World Depreciation Examples
In the commercial realm, a building that cost $2 million to build would have potential first-year deductions in the range of around $60,000 to $75,000. For residential properties, a new property that cost $500,000 to build would offer approximately $15,000 to $20,000 in deduction in its first year (the upper range being for brand new property). These examples illustrate the tangible financial benefits that a well-prepared tax depreciation schedule can provide to both commercial and residential property investors.
Residential Properties
| Property Type | Cost to Build | Year 1 (Full Year) Deductions | Cumulative Depreciation (Year 1 – Year 5) |
| 1 Bedroom Unit | $300,000 | $7,500 to $12,000 | $37,500 to $60,000 |
| 2 Bedroom Unit | $400,000 | $10,000 to $16,000 | $50,000 to $80,000 |
| 3 Bedroom House | $500,000 | $12,500 to $20,000 | $62,500 to $100,000 |
| 4 Bedroom House | $600,000 | $15,000 to $24,000 | $75,000 to $120,000 |
Commercial Properties
| Property Type | Cost to Build | Year 1 (Full Year) Deductions | Cumulative Depreciation (Year 1 – Year 5) |
| Small Office Building | $800,000 | $24,000 to $30,000 | $120,000 to $150,000 |
| Medium Office Building | $1,200,000 | $36,000 to $45,000 | $180,000 to $225,000 |
| Large Office Building | $2,000,000 | $60,000 to $75,000 | $300,000 to $375,000 |
| Warehouse | $1,000,000 | $30,000 to $35,000 | $150,000 to $175,000 |
The ACP Edge
Choosing ACP Quantity Surveyors means opting for over 40 years of experience in tax depreciation, a commitment that guarantees maximum returns for our clients. Our schedules are marked by their compliance and accuracy, ensuring peace of mind in an ever-changing regulatory landscape.
Moreover, we offer these expert services at competitive prices, ensuring cost-effectiveness without compromising the quality and thoroughness of our reports.
Claiming Your Tax Depreciation Schedule
To claim your tax depreciation schedule with ACP, give us a call on 1300 872 486 today to discuss your property’s specifics. Our team of experts will then conduct a comprehensive assessment of your property to gather the necessary information.
Following this, we will prepare your detailed depreciation schedule. This schedule can then be used to claim deductions on your next tax return, enhancing the profitability of your property investment.
Frequently Asked Questions
Can older properties benefit from a tax depreciation schedule?
Absolutely. Even properties that are several decades old can have significant deductions available. The age of the property does not preclude the possibility of depreciation benefits.
How often do I need a new tax depreciation schedule?
Generally, a schedule lasts for the lifetime of the property. However, if you undertake substantial renovations or additions, it may be necessary to update or create a new schedule to reflect these changes accurately.
Is the cost of a tax depreciation schedule tax-deductible?
Yes, the fee for preparing a tax depreciation schedule is 100% tax-deductible, only adding to its financial viability. This deduction is typically claimed in the same financial year that the schedule is prepared.
Can I back-claim depreciation if I haven’t been doing so in previous years?
Yes, in many cases, you can back-claim depreciation for previous years that you may have missed. The Australian Taxation Office allows adjustments to previously filed returns under certain conditions.