Property Depreciation Schedule Australia (2026): What You Can Claim
Complete guide to property depreciation in Australia: capital works (Div 43), plant and equipment (Div 40), quantity surveyor reports, and how to maximise deductions.
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Overview
Depreciation is one of the most valuable tax deductions for Australian property investors. A depreciation schedule can unlock thousands in annual deductions without spending a cent.
What Is Property Depreciation?
Depreciation allows you to claim the declining value of your investment property and its assets over time. There are two types:
Capital Works (Division 43)
Covers the building structure itself. You can claim 2.5% of construction cost per year for 40 years. Eligibility: construction starting after 15 September 1987.
Plant and Equipment (Division 40)
Covers removable assets: carpets, blinds, hot water systems, air conditioning. Each asset has its own ATO-set effective life.
2017 Change: For properties purchased after 9 May 2017, plant and equipment depreciation on second-hand assets can only be claimed by the original purchaser.
Do I Need a Quantity Surveyor?
Yes. A registered QS prepares a tax depreciation schedule itemising every claimable asset. Cost: $400-$700 (tax deductible). A typical schedule generates $5,000-$15,000 in first-year deductions.
How Much Can I Claim?
- New property (0-5 years): $15,000-$25,000/year
- 5-10 year old: $8,000-$15,000/year
- 10-20 year old: $5,000-$10,000/year
- 20-30 year old: $3,000-$7,000/year
Depreciation and Negative Gearing
Depreciation increases your total claimable expenses without affecting cash flow. This makes your property appear to make a larger loss for tax purposes.
Strategies to Maximise Depreciation
- Get a schedule immediately
- Renovate before renting — new items can be claimed at full value
- Choose newer properties
- Keep receipts for improvements
- Review your schedule annually
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Frequently asked questions
How much does a depreciation schedule cost?
A quantity surveyor report typically costs $400-$700 and is itself tax deductible.
Can I claim depreciation on an old property?
Yes, even 30+ year old properties have plant and equipment that can be depreciated.
What changed in 2017?
Plant and equipment depreciation on second-hand assets purchased after 9 May 2017 can only be claimed by the original purchaser.
Do I need a quantity surveyor?
Yes, only registered quantity surveyors can prepare depreciation estimates for tax purposes.
RealEstateCalc Editorial
Property & Finance ResearchThe RealEstateCalc editorial team researches and writes about Australian property, finance, and tax topics. All content is fact-checked against official sources including the ATO, state revenue offices, ASIC Moneysmart, and the RBA.
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