Tax Depreciation: Depreciating assets you can claim

Part of our commitment to our clients is to provide a Tax Depreciation Report on the hand-over of their newly built investment properties.

To provide more of a guided insight as to how this works, and how a property investor can save money over a purchase of a new property, have a read on.


Depreciating assets you can claim a deduction for include:

  • New assets

  • Substantial renovations

  • Limit on a deduction for the decline in value of second-hand depreciating assets for residential premises

  • Home turned into a rental property before 1 July 2017

  • Carrying on a business of letting rental properties

  • Calculating deductions for decline in value

New assets

You can claim decline in value for new assets but not for second-hand or used assets.

This includes your purchase of a newly built or substantially renovated property if no one was previously entitled to a deduction for the decline in value of the depreciating asset, and either:

  • no one resided at the property before you acquired it

  • the asset was installed for use, or used at this property, and you acquired the property within six months of it being newly built or substantially renovated.

Substantial renovations

Substantial renovations of a rental property are renovations in which all or substantially all, of a building is removed or is replaced. This could include the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

For renovations to be substantial, they must directly affect most rooms in a building.

We take into account renovations you make collectively to a house, such as the:

  • removal and replacement of the exterior walls

  • removal of some internal walls

  • replacement of the flooring

  • replacement of the kitchen.

Limit on a deduction for the decline in value of second-hand depreciating assets

Second-hand depreciating assets are depreciating assets that were already installed ready for use or used:

  • by another entity (except as trading stock)

  • in your private residence

  • for a non-taxable purpose, unless that use was occasional (for example, staying at the property for one evening while carrying out maintenance activities would be occasional use).

You can no longer claim a deduction for certain second-hand depreciating assets unless you are.

  • using the property in carrying on a business (including a business of letting rental properties)

  • an excluded entity.

Otherwise, you can only claim deductions for second-hand or used depreciating assets in residential rental properties if both of the following apply:

  • you purchased the asset before 7.30pm on 9 May 2017

  • you installed it into your rental property before 1 July 2017.


Source: https://www.ato.gov.au/


We have just secured another client of tax savings in as much as $15K!


This is with his Tax Depreciation Schedule Report upon handover and completion of the property he purchased through the: Positive Income Properties Subscriber Offer.


We offer our investor clients a FREE DEPRECIATION REPORT so they can hand this to their accountant and have their TAXABLE INCOME REDUCED.


***Actual table from the Tax Depreciation Schedule Report document of a property handover scheduled April 14 2022.


In this case, in the first full year, our client will have over $15,000 reduction in their taxable income - Talk to us about how we can secure a positive income property for you.