The deduction most landlords never claim
Rates, insurance, repairs, loan interest. Almost every deduction on a rental property has a payment behind it. Depreciation is the exception. It is claimable on paper, year after year, without another dollar leaving your pocket. It is also the deduction most landlords never claim.
Your building ages on paper
A rental property wears in two ways. The structure itself ages: the walls, the roof, the driveway, the built-in fixtures. So do the fittings inside it: carpets, blinds, appliances, the hot water system. The tax office recognises both kinds of decline and lets you claim them against your rental income each year.
The key word is decline. You are not claiming a bill you paid this year. You are claiming a share of what the building and its fittings cost, spread across their working life. The wear is real, the claim is real, but no invoice arrives. That is why it slips past so many owners.
Why you need a schedule
You cannot estimate depreciation yourself and in most cases neither can your accountant. Construction costs need to be assessed by a qualified quantity surveyor, who prepares a depreciation schedule: a report setting out exactly what you can claim each year for the life of the property.
It is a one-off exercise. The schedule is prepared once, hands your accountant the numbers every tax time after that and often returns thousands each year. Set that against a single fixed fee, which is itself generally deductible, and the decision rarely needs a second look. Most schedules pay for themselves many times over.
Not sure how this plays out for your property? A quick call gives you a straight answer.
Older homes count too
The common assumption is that depreciation belongs to new builds. Most owners of older properties assume they miss out. Most are wrong. Even older properties usually hold claimable value in appliances, flooring and recent works, including renovations completed before you owned the place.
The rules around older properties and second-hand fittings have shifted over the years, which is exactly why this is a specialist's assessment rather than a guess. A good quantity surveyor will tell you upfront whether a schedule is likely to be worth ordering before you commit to one.
When to get one
The best time is as soon as the property starts earning rent, so the claim runs from year one. The second best time is now. If you renovate or replace major fittings, update the schedule so the new work is captured. If you have owned for years without one, raise it with your accountant: missed claims from recent returns can sometimes be recovered.
Worth ordering a schedule if
- You have just bought an investment property
- You have renovated or replaced major fittings
- You have owned for years and never had one prepared
- You assumed an older property would not qualify
Where we fit in
We are property managers, not tax advisers, so we stay in our lane. What we do is make the process easy. We work with specialist quantity surveyors, point owners to the right people and coordinate access with the tenant so the inspection happens without fuss. Nothing left unclaimed, nothing left for you to chase.
A note. This article is general information only, not tax advice. What you can claim depends on your property, when you bought it and your own circumstances. Talk to your accountant or a qualified quantity surveyor before acting on anything here.
Not sure what your property is leaving on the table?
Book a quick call and we will point you to the right specialist, then handle the practical side from there.