Many property investors hesitate to order a depreciation schedule because of the upfront cost. In reality, depreciation is one of the few tax strategies that often pays for itself, sometimes in the very first year.
How much does a depreciation schedule cost?
In Australia, most property depreciation schedules cost between $500 and $800, depending on factors such as property type, age, size, and location.
This is a one-off cost. Once prepared, the same depreciation schedule can typically be used year after year by your accountant when completing your tax return.
How do investors recover the cost?
A depreciation schedule outlines the annual depreciation deductions you can legally claim on your investment property. These deductions reduce your taxable income, increasing your after-tax cash flow.
In many cases, investors recover the full cost of the depreciation schedule within the first year of deductions alone, with additional tax benefits continuing for years after.
Is the cost of a depreciation schedule tax deductible?
Yes. The cost of obtaining a property depreciation schedule is itself tax deductible and can usually be claimed in the same financial year it is incurred.
What types of properties benefit most?
- Newly built investment properties
- Established properties built after 1987
- Renovated properties with recent improvements
- Residential and commercial investment properties
Even older properties can still qualify for plant and equipment depreciation, depending on their fixtures and fittings.
Is a depreciation schedule worth it?
For most investment property owners, a depreciation schedule is one of the highest-return tax deductions available. While results vary depending on the property, the combination of upfront cost recovery and ongoing annual deductions makes it a compelling option for many investors.