A depreciation schedule is usually worth it if your property is new or recently renovated, and our free eligibility check tells you the answer before you pay.
Is a depreciation schedule worth it? For many property investors the answer is yes, and you can find out for certain before spending anything. A depreciation schedule is a report prepared by a quantity surveyor that lists the deductions available on the wear and tear of your building and its fittings. Whether yours is worth the fee comes down to three simple questions, and if the answer is no, we tell you so up front.
Most new builds and recently renovated properties make the schedule worthwhile quickly, while an older, untouched property with second-hand fittings may not. Rather than guess, we run a free eligibility check first, so you only pay for a schedule when it is genuinely worth having. The mechanics of how these claims work are covered in our guide to investment property depreciation.
The three questions that decide
Three questions tell us whether a depreciation schedule is worth it for you.
- When was the building constructed?
- What has been renovated?
- Are the fittings new to you?
The construction date matters because capital works deductions generally apply to buildings where construction started after 15 September 1987, claimed at 2.5 per cent a year over 40 years. Renovations and structural improvements follow their own rules and start dates, so even an older property can still hold claimable value. Fittings such as carpet, blinds and appliances fall under plant and equipment. New items are generally claimable, while second-hand items often are not for individual investors in residential property.
Is a depreciation schedule worth it? Where it pays off
A depreciation schedule is worth it almost every time for a new build or a property you have recently renovated. New construction can give you up to 40 years of capital works deductions, and new plant and equipment such as air conditioning, hot water systems, carpets and cooktops can be claimed from when the property is first rented or available for rent.
A recent renovation works in a similar way. Building work such as a new kitchen or bathroom is generally treated as capital works and claimed over time from when it was finished, even if the original building is older. New fittings added during the renovation are claimed as plant and equipment. Every schedule is built around the two halves explained in our guide to Division 40 and Division 43, so both the building and its removable items are captured.
When it may not be worth the fee
There are situations where a depreciation schedule may not be worth the money. An unrenovated property built before mid-September 1987 with second-hand fittings usually has little to claim. The original construction generally falls outside the capital works rules, and for most individual investors used plant and equipment does not qualify either.
The second-hand rule reinforces this. For most individual investors, previously used assets in a residential rental bought after 9 May 2017 are generally not claimable, so a property full of old, second-hand items may have nothing meaningful left to schedule. We walk through the detail in our article on depreciation for a second-hand property, but the short version is that this is exactly what the free eligibility check catches before you pay.
The fee is generally deductible, and the schedule lasts for years
The cost of preparing the report is generally deductible, and your accountant can confirm how it applies to your own return. It is also a one-off: a depreciation schedule lasts for years and can be used in every tax return until the deductions run out, rather than being a recurring cost. A good schedule helps maximise your deductions without overstating anything.
The report is prepared by a Certified Quantity Surveyor, not a real estate agent or valuer. Where construction costs are unknown, the ATO accepts an estimate by an appropriately qualified person such as a quantity surveyor. That is the point of the schedule: it gives your accountant a clear, ATO-compliant list of claims to use each year.
A quick worked example
Consider a townhouse built in 2021 and rented out from completion. Its capital works deductions run at 2.5 per cent a year over 40 years, and the new fittings, such as a split-system air conditioner, cooktop, carpet and blinds, are claimed as plant and equipment.
One schedule lists all of these line by line, and the same report keeps working in every tax return that follows. Because the claims run for many years, a new or recently renovated property like this is the kind we usually find worth doing. Your accountant works out what the claims mean for your own tax.
How the free eligibility check works
Before you pay anything, we run a free eligibility check on your property. We look at the construction date, any renovations and the condition of the fittings, then give you a straight answer on whether a schedule is likely to be worth it.
If it is not worth doing, we say so and you keep your money. If it is worth doing, we prepare a standard residential schedule for $600 including GST, usually within 3 to 5 business days, Australia-wide. The property is inspected by photos and video, with a site visit where needed.
Frequently asked questions
Should I get a depreciation schedule for an older property?
It depends on the age, any renovations and whether the fittings are new to you. A property built before mid-September 1987 and never renovated usually has little to claim, while a recent renovation can still make one worthwhile.
Is the depreciation schedule fee tax deductible?
Generally yes, the cost of preparing the schedule is deductible. Ask your accountant to confirm how it applies to your own position.
How do I know if a depreciation schedule is worth it before paying?
We run a free eligibility check first. If your property is unlikely to produce enough claims to justify the fee, we tell you so before you pay anything.
