Do I Need a Depreciation Schedule for my Rental Property? Here’s Why It Matters for Property Investors
- johnry8
- Sep 8
- 2 min read
If you own an investment property, a depreciation schedule could be one of the easiest ways to legally reduce your tax bill. Many property investors are missing out on thousands of dollars in deductions simply because they don’t realise what they’re entitled to.
The ATO allows investors to claim depreciation on both the building structure and the fixtures inside the property.
What Is a Depreciation Schedule?
A depreciation schedule is a detailed report prepared by a qualified quantity surveyor. It outlines the tax deductions available to you each year, based on how your property and its assets decrease in value over time.
There are two main types of depreciation you can claim:
Capital Works (Division 43) This applies to the structural parts of the property, such as walls, floors, concrete, and roofing. These are generally claimable on properties built after 15 September 1987 or where renovations were completed after 27 February 1992.
Plant and Equipment (Division 40) These are items that can be easily removed or replaced, like carpet, appliances, blinds, and air conditioning units. You can only claim depreciation on these if the property was brand new when you purchased it or if you installed the items yourself after buying.
Do You Actually Need One?
Absolutely. If you want to get the most out of your investment, a depreciation schedule is a smart and worthwhile step.
Here’s why it helps:
You can reduce your taxable income and potentially receive a larger refund each year
A single schedule can last up to 40 years, with just a one-time cost
It ensures you claim only what you’re entitled to under ATO guidelines
Even older properties may still have eligible deductions, especially if renovations were done
Only a qualified quantity surveyor is allowed to estimate construction costs, so it’s important to work with someone licensed and experienced in property tax depreciation.
Misconceptions That May Be Costing You
“My property is too old to claim anything.” This isn’t always true. If any renovations were made, even by a previous owner, there may still be deductions available.
“I bought it second-hand, so I can’t claim depreciation.” You can still claim capital works deductions. While plant and equipment may not apply for second-hand residential properties, the structure itself is often still deductible.
“I’ll do it later.” Delaying means missing out on immediate tax savings. You can back-claim for a couple of years, but getting your schedule done early helps maximise your returns and keeps things for your accountant.
Not sure if your property qualifies or how to get started with a depreciation schedule?