Depreciation Schedule Explained Simply
- Feb 9
- 2 min read
Why It Matters
At Rise Accountants, we regularly work with property investors who are surprised by how much depreciation can reduce the tax they pay each year. Many clients come to us after years of owning an investment property, only to realise they have been missing out on thousands of dollars in legitimate deductions.
Depreciation is not about spending more money. It is a non cash tax deduction that recognises the natural wear and tear of your property and its assets over time. When applied correctly, depreciation improves cash flow and increases the after tax return on your investment.
What a Depreciation Schedule Is
A depreciation schedule is a detailed report prepared by a qualified quantity surveyor. In our work with property investors, this report forms a key part of how we calculate and optimise annual tax outcomes.
The schedule typically covers two areas:
The building structure, including walls, floors, roofing, and fixed items
Plant and equipment, such as appliances, carpets, blinds, and hot water systems
How Depreciation Works in Practice
When a new client comes to us, one of the first things we review is whether a depreciation schedule exists and whether it is being used correctly.
In practice, the process usually looks like this:
You purchase an investment property
A quantity surveyor inspects the property and prepares the depreciation schedule
The schedule outlines yearly depreciation amounts
We include these deductions in your annual tax return
In most cases, the schedule does not need to be redone every year. A single report can often be used for up to 40 years, unless significant renovations or asset changes occur.
Who Can Claim Depreciation
Many investors assume depreciation only applies to new builds. In reality, we see depreciation benefits across a wide range of properties.
You may be able to claim depreciation if:
The property is income producing
Construction commenced after September 1987 for building deductions
The property contains depreciable assets
Common Mistakes We See Investors Make
From our experience, the most common issues include:
Assuming depreciation only applies to brand new properties
Never arranging a depreciation schedule
Relying on rough estimates instead of a professional report
Forgetting to account for renovations or replaced assets
How Rise Accountants Can Help
At Rise Accountants, we help property investors maximise legitimate deductions while staying compliant with current tax rules.
We work closely with trusted quantity surveyors and ensure your depreciation schedule is correctly applied in your tax return. More importantly, we explain how depreciation affects your cash flow and overall investment performance, so you can make informed decisions with confidence.
Not sure if your investment property is fully optimised for tax?