Frequently Asked Questions

Tax Depreciation

Our Tax Depreciation Reports are created by licensed Tax Agents and qualified Quantity Surveyors. These reports detail the annual tax depreciation of your investment property over several years, helping you reduce your taxable income and overall tax bill. Our calculations consider a reasonable allowance for the purchase price and are based on construction costs, providing accurate and comprehensive results for maximum tax benefits.

Our experienced Chartered Quantity Surveyors are the go-to experts for depreciation schedules. Recognized by the Australian Taxation Office (ATO) as having the necessary expertise to assess items for depreciation in line with TR 97/25, our surveyors bring years of industry experience and use cutting-edge tools and vast cost databases to estimate historical construction costs and create accurate depreciation schedules for all types of properties. Trust us to save you time, money, and hassle on your tax depreciation needs.

Even if you just purchased an investment property, you may be eligible to claim depreciation on the cost of the building and other items, starting when you rent it out. 

Once you’ve submitted a complete application, including payment and property details, we will assess the property information through our online system. Using the property information you’ve given us, we’ll be able to include as much depreciation as possible in your report. Once we receive your payment, we will immediately begin working on the report and email it to you.

We have found a small number of properties that are not worth depreciating.  If your property was constructed before September 15, 1987, but after Division 43 (Building Allowances) was dissolved, you may still be able to depreciate it under Division 40 (Plant and Equipment). In addition, any recent renovations to your property may qualify for building allowances and plant and equipment depreciation.

Are you looking to have your property’s depreciation report? We can send you an estimate! Click the button below, fill out the form, and get a free depreciation report estimate!

Depreciation is likely to be higher for older properties that have been renovated, such as with a new kitchen or bathroom. Whether or not you have receipts to include in your depreciation plan, our Quantity Surveyor can determine how much the work will cost.

Whenever possible, we recommend having a professional property or building inspector to check over the site. The inspectors have received extensive training in evaluating eligible assets, spotting renovation work, and estimating construction expenses. However, there are times when a site inspection just can’t be done for various reasons. In these cases, eDepreciation will refund the survey cost to the client.

We offer the flexibility to backdate your depreciation report to the necessary period. Keep in mind that the allowable time frame for claiming missed years of depreciation may vary depending on your tax situation and complexity. We recommend consulting with your accountant to determine the specific time limit, which is usually around 2 years but could be longer in some cases.

Low value pooling is a method of calculating depreciation for certain assets that are eligible for depreciation under the Australian tax laws. Under this method, assets with a cost of less than a certain threshold (currently $1,000) can be depreciated at an accelerated rate. This means that the depreciation rate is higher than the normal rate for those assets, allowing for a larger tax deduction in the earlier years of the asset’s use. The low value pooling method is often used for items such as computers, printers, and other small equipment.

The choice between using the prime cost method and the diminishing value method for depreciation depends on several factors, including the asset’s expected useful life, the pattern of its decline in value, and your cash flow requirements.

The prime cost method is usually used for assets that have a long expected life and lose their value gradually. It provides a consistent, predictable reduction in value each year, making it easier to plan for future expenses. This method may be preferable for assets that generate income consistently over time.

The diminishing value method is generally used for assets that decline in value more rapidly at the start of their useful life and slower towards the end. It front-loads the depreciation deductions, meaning you can claim larger deductions in the earlier years of an asset’s life, which can improve your cash flow. This method may be preferable for assets that are likely to become obsolete or wear out quickly.

In general, it’s a good idea to consult with our team or a tax professional to help you choose the most appropriate method for your particular situation.

At eDepreciation, we understand the importance of maximizing your tax deductions for your investment properties. In line with this, we provide Div 40 capital loss figures on assets affected by the May 9th 2017 legislative changes. These assets are no longer eligible to be claimed for depreciation; however, you can still claim them as a deferred tax benefit. This means that you can offset any future capital gains you may have against the capital loss figures of these assets, resulting in a lower tax bill in the long run. Our team of qualified quantity surveyors can assist you in understanding how to make the most of these capital loss figures and other depreciation methods to help you save money on your taxes.

The prime cost method is usually used for assets that have a long expected life and lose their value gradually. It provides a consistent, predictable reduction in value each year, making it easier to plan for future expenses. This method may be preferable for assets that generate income consistently over time.

The diminishing value method is generally used for assets that decline in value more rapidly at the start of their useful life and slower towards the end. It front-loads the depreciation deductions, meaning you can claim larger deductions in the earlier years of an asset’s life, which can improve your cash flow. This method may be preferable for assets that are likely to become obsolete or wear out quickly.

In general, it’s a good idea to consult with our team or a tax professional to help you choose the most appropriate method for your particular situation.