Property Depreciation Schedule Australia (2026): What You Can Claim

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

1. Get a schedule immediately
2. Renovate before renting — new items can be claimed at full value
3. Choose newer properties
4. Keep receipts for improvements
5. Review your schedule annually

Model your investment: Negative Gearing Calculator | Investment Yield Calculator.