What is Tax Depreciation?

Tax depreciation allowances reduce your taxable income. Just like you claim wear and tear on a car purchased for income producing purposes, you can also claim the tax depreciation of your investment property against your taxable income. The gross rent received on your investment property form part of the owner(s) assessable income, however non-capital expenses are allowable as tax deductions. Income and deductions are apportioned the owners by the same ratio as their share of the property.

Allowable Deductions:

• Depreciation of Plant and Equipment (items within the building like ovens, dishwashers, carpet, light fittings, blinds etc.)
• Depreciation of Building Allowance (construction costs of the building itself, such as concrete and brickwork)
• Managing Agent Fees
• Advertising costs
• Repairs and maintenance
• Insurance
• Rates (Council and Water)
• Loan interest
• Gardening/lawn mowing
• Pest control
• Travel

Negative Gearing

In cases where expenses exceed rental income, the excess becomes tax deductible against any other income.

Please contact your accountant for more information or contact us for our preferred partners.