Rental property tax tip #3 – deprecation report

If the property has had any significant renovations or buildings costs done in the last 25 years, obtain a quantity surveyor depreciation report that will provide a summary of depreciation and capital allowances that you can claim as a tax deduction each year.

Some property assets are depreciated over their useful life of about 8-12 years like hot water services, heaters & coolers, stove & ovens, carpet, curtain & blinds, etc. Whilst construction cost of flooring, walls roofing, plumbing, electrical, etc are claimed over 40 years.

Please note that there was a tax ruling change last year, that for investors purchasing rental property after 9 May 2017, some depreciation on assets over the 8-12 year useful life is not claimable, unless you personally paid and replaced these assets (so not part of original purchase price (unless it is a new property).

By Patrick Hoey