Property Tax Depreciation

Many property investors are unaware of the substantial tax benefits associated with owning an income producing property.

Walton Smith Consultants are specialists in the field of property tax depreciation. Under Australian income tax law, owners of property used to produce assessable income are entitled to claim the decline in value for certain building elements and associated articles of plant and equipment.

Whether you own a:

  • Residential investment property,
  • Commercial or industrial building,
  • Block of units or
  • Rural property.

Walton Smith Consultants have the knowledge and experience to help you with your tax depreciation needs in Dubbo, Wellington, Orange, Bathurst, Mudgee, Parkes, Forbes, Wellington, Coonabarabran, Cobar, Narromine, Gilgandra, Blayney, Warren, Coonamble and across Central West & Regional NSW.

We have been employed and are recommended by some of the regions biggest and most experienced Accountants (Boyce & Co, Lawrence Bennett & Portelli, Wright Partners, Crowe Horwath (WHK) - Dubbo, Forbes, Parkes and Wellington).

What is Property Tax Depreciation?

Depreciation refers to an assets decline in value over its anticipated life even if the overall value of the investment increases. As the land value of an investment increases the condition and value of the property decreases.

A property tax depreciation schedule is a report that outlines the decline in value that a property investor is entitled to. Walton Smith Consultant's are committed to providing specialised tax deprecation schedules prepared to the ATO requirements which will improve your investment properties performance.

What Can I Claim?

This is where property tax depreciation becomes tricky. There are certain articles of plant and equipment that can be deducted at an increased rate compared to the building itself. Basically our property tax depreciation schedules are split into two sections:

  • Capital Works Allowance: Capital works are those building elements that are integral to the building structure i.e. walls, floors, roofs etc. Residential investment properties constructed after 19th July 1985 are eligible to claim 2.5% or 4% of the original construction cost depending on the date the property was constructed.

    The ATO stipulates that "an appropriately qualified person" (TR 97/25) must be engaged to calculate original building costs if accurate original costs are unavailable.

    As qualified Quantity Surveyors, Walton Smith Consultants are appropriately qualified as outlined by the ATO to compile property tax depreciation schedules.

    Valuers, Accountants and Real Estate Agents are generally not appropriately qualified.

  • Decline in Value of Plant and Equipment: Articles of plant and equipment can be deducted at an increased rate compared to the capital works allowance. There are many items identified by the ATO which can be categorised as plant and equipment. For example: carpet, curtains, white goods, air-con etc are all considered to be plant and equipment (NB: this list is not exhaustive).

    Walton Smith Consultants have an intimate knowledge of what is and is not considered to be plant and equipment. This is particularly important now that the ATO is cracking down on illegitimate claims.

How Much Does It Cost?

The cost varies depending on the type, age and purpose of the investment property. Our fees are also fully tax deductible.

To obtain an obligation free quote please click here.

Frequently Asked Questions

If you want to save tax and you own an income producing property (rental or business) then you must obtain a property tax depreciation schedule. Schedules prepared by qualified professionals not only ensure that all possible deductions are identified but also that governing laws and requirements are met. This reduces the taxpayers risk of failing an ATO audit.

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