Accurate • ATO Compliant • AIQS Certified
Tax depreciation is one of the most effective ways for property owners and investors to improve cash flow and reduce taxable income over time. When applied correctly, it converts construction costs and asset values into clear deductions that can be claimed year after year.
This service focuses on accurately identifying and applying those deductions. Every depreciation outcome is prepared by an AIQS-certified quantity surveyor, using methods recognised by the Australian tax system and supported by more than 35 years of experience in Australian property. The result is a tax depreciation service that is reliable, compliant and easy for both property owners and accountants to work with.
What Is Tax Depreciation?
Tax depreciation explains how the cost of constructing and improving a property can be claimed progressively as a tax deduction, rather than relying on market value. Depreciation is based on the physical components of a property and how they decline in value over time.
The Australian Taxation Office sets the framework for these deductions, which is applied to income-producing properties across Australia.
The ATO allows deductions under two key categories:
- Division 43 (Capital Works), which applies to long-life structural components
- Division 40 (Plant and Equipment), which applies to removable or mechanical assets
Tax depreciation brings these elements together into a structured framework, allowing eligible deductions to be applied accurately and consistently throughout the property’s life. These deductions are ultimately set out in professionally prepared tax depreciation reports.
How Tax Depreciation Is Applied
Tax depreciation is applied from the point a property becomes income-producing or genuinely available for rent. Deductions are then claimed annually, creating a predictable and ongoing benefit rather than a one-off outcome.
With this approach, property owners can factor depreciation into broader financial planning. In practice, depreciation is documented through a long-term tax depreciation schedule, which outlines how deductions are applied year by year in line with ATO guidance on depreciating assets.
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What the Tax Depreciation Service Covers
The tax depreciation service assesses all eligible components of a property, regardless of age or type. This includes:
- Structural elements such as walls, floors, roofing and fixed finishes
- Renovations, extensions and upgrades completed over time
- Fixed internal features and building services
- Mechanical and electrical assets that support the building
Even older properties may contain substantial capital works deductions, particularly where previous owners have conducted renovations and home improvements. Each property is assessed on its own merits, rather than any assumptions based on construction date.
Why Property Owners Use Tax Depreciation
Tax depreciation remains one of the most under-utilised deductions available to property owners. When applied correctly, it consistently and measurably reduces taxable income and improves after-tax cash flow.
Because depreciation is based on construction and asset values, it does not require additional spending after purchase. Once established, the benefits continue to apply across many years, making tax depreciation both an immediate and long-term planning tool.
Who the Tax Depreciation Service Is Suited To
This service is commonly used by:
- Residential property investors
- Commercial and industrial property owners
- Owners of mixed-use developments
- Property owners who have completed renovations or upgrades
- Accountants supporting investor clients
Eligibility depends on how the property is used and its ownership structure, which is why professional assessments are so important.
When to Arrange Tax Depreciation
Many property owners arrange tax depreciation shortly after purchasing an investment property so deductions can be applied from the earliest possible point. It is also relevant when preparing for tax time, after completing renovations or when reviewing the long-term performance of a property.
Arranging depreciation early helps ensure eligible deductions are not missed in the first financial year. In some cases, depreciation outcomes are reviewed with construction cost estimates to support feasibility and budgeting decisions.
How ACP Delivers the Tax Depreciation Service
The tax depreciation service follows a clear, structured process to ensure accuracy and transparency.
Property Review
Construction details, improvements and available documentation are reviewed to build a complete understanding of the property. This may include information previously used in insurance replacement valuations.
Inspection (when required)
An AIQS-certified quantity surveyor inspects the property to identify structural components and plant items, ensuring eligible assets are captured.
Costing and Classification
Assets are categorised under the correct depreciation division and costed using ATO-aligned valuation methods.
Depreciation Calculations
Year-by-year deductions are calculated using compliant methods, with clearly documented assumptions.
Service Delivery
The depreciation outcomes are delivered in a clear, accountant-ready format suitable for ongoing use and audit support.
Why Choose ACP for Tax Depreciation
- AIQS-certified quantity surveyors
- ATO-compliant methods and valuation standards
- 35+ years of experience in Australian property
- Clear, structured and easy-to-follow reporting
- Fast turnaround and fixed-fee pricing
- Consistent outcomes across residential, commercial and mixed-use properties
- Reliable documentation that aligns with related services such as
project auditing and risk analysis - Consistent results across Sydney investment properties and all regions are supported through our national service locations
Frequently Asked Questions
Do older properties qualify for tax depreciation?
Older properties often still qualify for depreciation under Division 43, and renovations or upgrades completed over time can add on further eligible deductions. Each property is assessed individually to confirm what applies.
How long do tax depreciation deductions apply?
Capital works deductions can apply for up to 40 years, while plant and equipment assets are claimed over their effective life. The exact timeframe depends on the asset type and construction date.
Is tax depreciation only relevant for investors?
Tax depreciation generally applies to income-producing properties, including rental and commercial assets. Owner-occupied properties are not usually eligible.
Do renovations affect tax depreciation?
Renovations typically introduce new depreciable assets and capital works, which can increase available deductions when assessed correctly.
Is tax depreciation applied automatically?
Tax depreciation is not applied automatically and requires professional assessment and documentation. Without this, eligible deductions may be missed or misapplied.
Tax Depreciation With Confidence
Accurate tax depreciation helps maximise eligible deductions and provides long-term clarity for property owners and accountants. With a professionally prepared report, deductions can be applied correctly and confidently each year.
To arrange tax depreciation for your property or request a quote, call 1300 550 311 or submit an online enquiry.