Tax depreciation schedules: what they are and how we arrange one for you

Most landlords know depreciation exists. Far fewer hold the one document that lets them actually claim it: a tax depreciation schedule. Without one, your accountant has nothing to work with, and the deduction quietly goes unclaimed year after year.

We covered what depreciation is and why it matters in an earlier post. This one is about the practical side: what a schedule actually is, whether your property justifies one and how we arrange it for the owners we manage.

What a tax depreciation schedule actually is

A depreciation schedule is a one-off report prepared by a qualified quantity surveyor. It itemises what your building and its fixtures are worth for tax purposes, then maps out what you can claim every year for up to 40 years. Your accountant simply reads the year's figure off the schedule at tax time.

Broadly, the schedule covers two things. Capital works, the structure itself: walls, roof, tiling, built-in cupboards. And plant and equipment, the items inside that wear out faster: ovens, air conditioning, carpets, blinds, hot water systems.

A Gallery-managed apartment interior

Is your property worth a schedule?

Not every property benefits equally, and an honest answer up front saves you a report fee. As a rule of thumb:

  • New or near-new builds are the strongest candidates. Both the structure and everything inside it are claimable, and the annual deductions in the early years are usually substantial.
  • Renovated properties often surprise their owners. Renovation works can be claimable even if a previous owner did them, and a quantity surveyor can estimate costs you never saw receipts for.
  • Established properties bought after May 2017 are more limited. Rule changes mean second-hand plant and equipment generally cannot be claimed by the new owner, though the building's capital works often still can be, for properties built after 1987.

A good quantity surveyor will tell you before you commit whether the likely deductions justify the report. The fee itself is also tax deductible.

Why owners put it off, and why that costs them

A schedule is one of those tasks that never feels urgent. There is no deadline attached to it, no one chases you for it and the cost of not having one is invisible because it never appears as a bill. It just shows up as tax you did not need to pay.

The good news: schedules can generally be arranged at any point in the year, the report lasts the life of your ownership and if you have missed claims in recent years your accountant can often amend prior returns to recover them.

How we help our owners with this

If your property is managed by The Gallery, we make this easy. We coordinate the whole thing: engaging a qualified quantity surveyor, arranging access to the property with your tenant so you do not have to, and making sure the finished schedule lands with you and your accountant. Come tax time, it sits alongside your annual statement so everything your accountant needs is in one place.

We are a boutique real estate agency specialising in property management and leasing across Inner Sydney, and this is part of what managing properly means to us: your property working as hard as it can, on the income side and the tax side.

Want one arranged?

If you own an investment property and do not have a depreciation schedule, or you are not sure whether yours is worth updating, use the form below or contact us and we will set it in motion. If you are not yet with The Gallery, it is a good excuse to book a call.

General information only, not tax advice. Speak to your accountant about your specific circumstances.

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