Tax Depreciation
Schedule Adelaide

The Australian Taxation Office (ATO) allows investment property owners to claim deductions for the fair wear and tear on an investment property and its fittings. Tax depreciation is essentially a non-cash deduction. You don’t necessarily have to directly incur the expense to be able to claim tax deductions because you can inherit deductions upon acquisition of the property (different rules apply for residential properties purchased post 9 May 2017). Tax depreciation is split into two categories: Division 43 Capital Works Allowances (the building itself) and Division 40 Plant and Equipment (eg. carpets, blinds, A/C, ceiling fans etc.)

Tax Depreciation helps; 

• Reduce your taxable income which results in more cash in your pocket 
• Increase your cash flow which is essential for managing South Australian land tax obligations and rising holding costs.
• Provide a greater financial return for your investment supporting your financial freedom 

Division 43 Capital Works Allowances relate to the building’s structural components, such as bricks, roofing, framing, windows, doors, plaster, and kitchen cabinetry.

Division 40 Plant and Equipment covers items like carpets, blinds, air conditioning units, ceiling fans, and kitchen appliances.

For residential properties, Division 40 deductions are generally only available for new properties, unless the ownership structure is through a company or trust. 

If the property was purchased after 9 May 2017 and is held in a personal name, Division 40 deductions cannot be claimed for second-hand assets unless those assets were newly acquired by the current owner.

Anyone who owns an income-producing property. Tax depreciation is not available on your home/Principal Place of Residence (PPOR).

Depreciation tax deductions are available to residential property investors whose investment property was built after 15 September 1987, commercial properties when built after 20 July 1982 and any refurbishments/renovations/improvements from 27 February 1992. Owners do not have to know when these works were undertaken -- this is researched by the tax depreciation provider who is qualified to estimate construction costs and asset values. Plant and equipment depreciation is also available on all new buildings and all existing properties when purchased prior to 10 May 2017. In Adelaide, many investors purchase older character homes in suburbs like Prospect or Unley. While the original structure may be older, any refurbishments, extensions, or renovations completed by previous owners since 1992 are still depreciable. In summary, 99.9% of investment properties will be entitled to some form of depreciation deduction.

A tax depreciation schedule for an Adelaide property outlines the eligible tax depreciation deductions available over the effective life of the building and its assets. It typically includes assessed capital works deductions, eligible plant and equipment, and a year-by-year breakdown of deductions that can be claimed in your tax return.

These tax depreciation schedules are prepared by qualified Quantity Surveyors in accordance with Australian Taxation Office guidelines and are designed to support accurate claims for both residential and commercial properties across South Australia.

A depreciation report provides the supporting detail your accountant needs to apply depreciation correctly in your tax returns. It identifies eligible assets, construction costs and applicable depreciation allowances, helping ensure claims are accurate, compliant and consistent across each financial year.

By clearly setting out allowable deductions, a depreciation report can help property investors correctly claim tax deductions and avoid missed entitlements or reporting issues.

Yes, and this is often a "hidden win" for long-term investors. The structural component of an investment property (Division 43) has an effective life of 40 years, meaning deductions can be claimed on any property built post-September 1987.

If you haven’t been claiming, you haven’t necessarily lost out on those savings forever. Our local specialists understand the specific nuances of tax depreciation Canberra property owners face, particularly when it comes to "catching up" on missed deductions. Your accountant can generally use our report to retrospectively amend your tax returns for the previous two financial years.

It is a completely legitimate process, and one the ATO actually encourages, to ensure your tax records are accurate. For many of our clients, this results in a significant, immediate boost to their cash flow that they weren't even aware they were entitled to.

Yes. Even for new properties in South Australia, and master-planned communities like Mount Barker or Lightsview, a tax depreciation schedule is recommended to ensure all eligible deductions are identified and applied correctly from the first year the property is income-producing. While construction records may be available, a schedule confirms how capital works, and assets should be depreciated over their effective life.

This helps ensure depreciation is claimed correctly from the outset and supports long-term planning around cash flow and future tax outcomes.

Yes, and this is where Quantity Surveyors can add serious value with a rental property depreciation schedule. It does not matter if the works were undertaken by a previous owner. When an investment property is purchased, the property investor has also purchased the entitlement to make a depreciation claim on all of the property’s improvements.

Most houses 10+ years old will have had work done. The most typical being: 

• Bathroom – commonly worth up to $25,000 
• Kitchen – commonly worth up to $30,000 
• Floor & Wall Tiles – commonly worth up to $10,000 

On a 10–30-year-old property there is $65,000 right there which could be detailed in a tax depreciation schedule. 

This can add up to $1,625 per year for the next 40 years (2.5% x $65,000), depending on the dates of renovation completion.

If a client is about to renovate an investment property it may be worth recommending a pre-renovation inspection. This inspection allows a Quantity Surveyor to identify what assets or capital works are going to be demolished or thrown out. Value can be assigned to these assets and they can be written off as an immediate tax deduction. A pre-renovation inspection and ‘scrapping report’ can save thousands which can offset the loss made through the renovation period. 

In many cases, yes. The Australian Taxation Office recognises Quantity Surveyors as appropriately qualified to prepare tax depreciation schedules when construction costs or asset values are unknown or incomplete. This is common for both residential and commercial investment properties in Adelaide.

Engaging a Quantity Surveyor helps ensure depreciation is calculated in line with current tax laws and based on accurate estimates. While Quantity Surveyors' fees apply, these costs are generally tax deductible and may be outweighed by the potential tax savings identified through correctly claimed depreciation.

A professionally prepared schedule can also support longer-term planning, including budgeting for maintenance and sinking funds, while providing tax depreciation schedules Adelaide property owners trust for ongoing tax reporting.

Quantity Surveyors are recognised by the ATO as the most suitably qualified professionals to estimate the depreciable expenditure spent on the property prior to its purchase, as well as the value of the fittings and equipment within the property.  In accordance with ATO Tax Ruling 97/25, if a residential investment property, for example, was constructed after September 1987 and/or construction costs are unknown, a registered and qualified Quantity Surveyor must be engaged to produce a commercial or residential tax depreciation schedule. Unfortunately, an Accountant cannot do this for investors. 

Our investment property depreciation schedules start from $600 + GST.

We’ll provide you with one tax depreciation schedule that lasts up to 40 years of claim and the fee is 100% tax-deductible.

We can also undertake a retrospective tax depreciation schedule if you haven’t been claiming deductions so that you don’t miss the tax benefits for your commercial or residential investment properties.

ATO Amendment Period

• Individuals: You can generally amend your tax returns for up to 2 years from the date of assessment.
• Companies, trusts, or complex structures: May have up to 4 years to amend returns. 

This means you can backdate your depreciation schedule to the date the property was first used for income-producing purposes, but you can only claim missed deductions for the years still within the amendment window.

To find out exactly how much a depreciation schedule costs for your property, add the details using the link below to receive your obligation-free quote.

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