Start with eligibility, not a headline saving
The amount available cannot be established from a property listing, purchase price or suburb alone. Construction history, assets, ownership and income-producing use affect the assessment. Avoid treating a generic annual deduction range as an estimate for your property.
Assemble the evidence
Provide purchase documents, construction and improvement records, rental dates, ownership shares and any existing schedule. Flag assets replaced since purchase and periods of private use. These details help identify what needs assessment and avoid duplicated claims.
Separate the building from its assets
Capital works and depreciating assets are assessed under different rules. Previously used residential assets can face restrictions, while building and renovation expenditure needs its own eligibility review. The schedule should clearly explain categories and assumptions.
Ask your accountant to assess the result
A schedule supports the tax return; it does not determine every allowable claim. Your accountant needs to consider use, ownership, previous deductions and the applicable year. Where historical information is missing, agree what records or professional cost estimates are required.
Understand the tax effect
A deduction is not an equal cash payment. For illustration only, an eligible $1,000 deduction at an assumed effective marginal rate of 30% would reduce tax by $300 if it can be fully used on that basis. Actual outcomes depend on the taxpayer and other rules; this is not a property-specific estimate.
Frequently asked questions
Can you quote my deduction before reviewing records?
A reliable assessment requires the property facts and evidence. A marketing estimate is not a confirmed entitlement.
Can I use the seller’s schedule?
Give it to your accountant and preparer for review. Ownership, costs, assets and applicable treatment may differ.
Sources and further reading
- ATO: Work out your capital works deductions — Eligible construction expenditure and applicable deduction rules.
- ATO: Second-hand depreciating assets — Restrictions relevant to previously used residential rental assets.
Arrange the right report
Explore tax depreciation with Propti. Send the property address, purpose, required date and recipient’s instructions when you request a property report quote.