South East Queensland’s specialist Quantity Surveyors for Tax Depreciation
Client Case studies
Client Case studies
Here’s a modern residential home, built in 2016 for around $300,000 (including hard landscaping).
My client recently purchased this property, so we had to use the “new” tax depreciation legislation. That means he can’t claim immediate deductions for the loose items (Div. 40) but he can still claim depreciation on all fixed items and structures.
To that end, it includes:
Building
Driveway
Fencing
Retaining walls
Repairs
Renovations
Clothes line
TV antenna
Shed
Etc
Here’s what my client was able to get in depreciation—and considering the purchase price, he has done very well for himself:
Year
Depreciation amount
Return (32.5% tax bracket)
Return (37% tax bracket)
1st year (part)
$3,395.83
$1,103.65
$1,256.46
Years 1–5 accumulated
$33,895.80
$11,016.14
$12,541.45
Years 1–10 accumulated
$72,020.83
$23,406.77
$26,647.71
Here’s a commercial property built in 2004 for about $1,010,000, including hardstand and fencing.
Being a commercial property, this one falls under the “old” legislation—the ATO allows commercial properties to still get maximum deductions.
Here’s what my client was able to get in depreciation. Not bad—and considering the high demand for industrial space, he should be very happy with the results. Imagine getting this much money back in your tax returns in exchange for doing nothing:
Year
Depreciation amount
Return (32.5% tax bracket)
Return (37% tax bracket)
1st year (part)
$22,436.88
$7,291.99
$8,301.65
Years 1–5 accumulated
$147,689.80
$47,999.19
$54,648.56
Years 1–10 accumulated
$288,293.39
$93,695.35
$106,668.58
Although built in the 30s, this house had several facelifts over the years. Most recently, the last owner pulled out all the stops and did a major renovation. Plus, the house was repositioned on the block, creating a splitter block with a granny flat in the back yard.
As you can see, I didn’t go out of my way to find the most elaborately renovated old house I could. This is just one of the most recent properties we have tackled. But, like nearly all investment properties, there is lots of depreciation meaning less tax payable—and better cash-flow for the owner.
Note that the works carried out by the various previous owners that did not survive the last renovation, cannot be claimed in the tax depreciation report. Items must be “fixed and in position.” Further to that, although the walls have been painted 15 times, sadly only the most recent paint job is claimable.
A sample of the results on claimable amounts
Here’s the table of calculations for this property. Unlike the ones above, where I summarized the tax savings, this table is taken directly from the Tax Depreciation Report, which is why it looks a bit different. The extra detail can be helpful to get a full picture of how the savings break down by year. Note the first year claim—$18,633.
1st (part) year
2nd year
3rd year
4th year
5th year
6th year
7th year
8th year
9th year
10th year
Financial year
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
2025/26
$
$
$
$
$
$
$
$
$
$
Building Allowance
2,683
3,320
3,320
3,320
3,320
3,320
3,320
3,320
3,320
3,320
Depreciable by Diminishing Value
11,812
10,122
6,141
3,813
2,596
1,621
1,119
779
545
383
Depreciables for Low Value Pool Assets (first year or part thereof)
