Claiming Your Investment Property's Depreciation

Did you know you can claim back the depreciation you have incurred on your investment property for up to two years?

It’s a common misconception among property investors that if they’ve missed claiming depreciation in previous years, they can’t go back and claim it. But this isn’t entirely true.

Property investors can adjust their depreciation claims for previous years that they’ve missed. Claiming depreciation deductions is an excellent way for property investors to maximise their tax benefits and increase their returns on investment.

There's two types of depreciation you can claim:

1. Capital Works depreciation
2. Plant and Equipment depreciation.

Capital Works depreciation refers to the decline in the value of the building’s structure, such as walls, floors, roofs, and plumbing. Depreciation on Plant and Equipment assets refers to the loss of value of the property’s removable assets, such as appliances, carpets, and air conditioning units.

The Australian Taxation Office provides guidelines for how much investors can claim for depreciation each year, which can vary depending on the property’s age and assets.

Claiming Back-Dated Depreciation

To back-date your depreciation claim, you do need to get in touch with a Quantity Surveyor who can create a property depreciation schedule for your investment property. Your accountant will then request the ATO to amend your previous tax returns to include the missed depreciation deductions.

If you are looking for a team of experienced Quantity Surveyors and tax accountants who can provide a comprehensive depreciation schedule for your investment property, and help you identify missed deductions on depreciation assets and backdate your claims, we recommend Duo Insurance.

Looking for more information? This article by Duo Insurance is a great guide.