Tax Depreciation Schedule Australia

A tax depreciation schedule identifies all depreciable items in an investment property and calculates the tax deductions available to the owner over the effective life of each asset. It covers Division 40 plant and equipment items — such as carpets, appliances, blinds, hot water systems, and air conditioning units — and Division 43 capital works, which relate to the building structure itself, including walls, roofing, and fixed improvements.

Both new and existing properties qualify for depreciation deductions, although the rules differ depending on when the property was built and when plant and equipment items were first used. Properties built after 15 September 1987 are eligible for Division 43 capital works deductions at 2.5% per year, while Division 40 items are depreciated based on their individual effective life as determined by the ATO.

For Division 40 items, the ATO allows two calculation methods, and a professional schedule shows both so your accountant can choose. The diminishing value method front-loads deductions — each year’s claim is a percentage of the asset’s remaining value (200% divided by the effective life) — while the prime cost method spreads the deduction evenly across the asset’s effective life. Effective lives come from the ATO’s published determinations, and low-cost items get accelerated treatment: assets costing $300 or less can generally be written off immediately, and items under $1,000 can enter a low-value pool with higher pooled rates. Your accountant applies the current-year thresholds; the schedule is built so either method can be claimed.

A complete schedule is a one-off document that serves for the life of the investment: it itemises every claimable asset with its value, effective life, and both calculation methods, then projects the deductions year by year for up to 40 years — so it only needs to be commissioned once, and updated only after significant renovations.

Our ATO-compliant tax depreciation schedules are prepared by qualified quantity surveyors and RICS-certified valuers. A thorough on-site inspection ensures that every claimable item is identified and correctly classified. Many investors miss thousands of dollars per year in legitimate tax deductions simply because they have never obtained a professional depreciation schedule. The cost of the schedule is itself tax-deductible, and it typically pays for itself many times over in the first year alone.