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What is Tax Depreciation

Tax Depreciation Schedules

Depreciation is the natural wear and tear that occurs to a building and the assets within it over time

A tax depreciation schedule outlines all available property depreciation deductions you can claim at tax time.


Case study:
An old three bedroom house built in 1970 purchased for $500,000

The figures:

  • Trent purchased an older three bedroom house for $500,000 just over one year ago.
  • Prior to making a depreciation claim, Trent’s investment property was earning a rental income of $490 per week with a total income of $25,480 per annum.
  • Trent’s yearly expenses for the property totalled $36,738.
  • Towards the end of his first year of owning the property this meant his annual after tax outlay amounted to $7,093 or $136 per week.

After hearing about the benefits of making a depreciation claim from his Accountant, Trent contacted BMT Tax Depreciation who completed a thorough site inspection of his property and provided a detailed tax depreciation schedule. This schedule outlined that Trent was entitled to a depreciation deduction of $6,000 in the first full financial year for his property.

The following scenario shows Trent’s cash flow with and without a depreciation claim.

A Tax Depreciation Schedule reduced Trent’s annual outlay for the property to $4,873 per annum or $94 per week, a difference of $42 per week or $2,220 in just the first year.

*information provided by BMT



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