What is a depreciation schedule?

October 17, 2022

Depreciation schedules are an important tool for managing your finances and tax liabilities as a property owner in Australia. In this article, we'll explain what depreciation is, what a depreciation schedule is, who prepares them, how often you need one and the benefits of having one.

What is depreciation?

Depreciation is the gradual reduction in the value of an asset over time. For example, a car will depreciate in value as it gets older and accumulates wear and tear. The same is true for a property.

What is a depreciation schedule?

A depreciation schedule is a document that details the depreciation of an asset over time. It will show the estimated value of the asset at the end of each financial year, taking into account depreciation.

Who prepares a depreciation schedule?

A depreciation schedule is prepared by a qualified quantity surveyor. They will inspect the property and compile the schedule based on their findings.

How much does it cost to have a depreciation schedule prepared?

The cost of having a depreciation schedule prepared will vary depending on the size and complexity of the property. However, as a general guide, you can expect to pay between $300 and $1,000.

How often do I need a depreciation schedule?

You will need a new depreciation schedule whenever there are significant changes to the property, such as renovations or additions.

How is the depreciation schedule used?

The depreciation schedule is used to calculate the amount of depreciation you can claim as a tax deduction each year. This can be a significant saving, particularly if you own a property that is subject to a lot of wear and tear.

What are the benefits of having a depreciation schedule?

The main benefit of having a depreciation schedule is the tax savings you can achieve. However, there are other benefits, such as being able to accurately track the value of your asset and plan for future repairs and maintenance.

Is there anything else I need to know about depreciation schedules?

Yes. It's important to note that depreciation schedules are only available for investment properties. If you own a residential property that you live in, you cannot claim depreciation.

Depreciation schedules are a valuable tool for property investors in Australia. They can help you save money on taxes and keep track of the value of your asset. If you're thinking of investing in property, be sure to speak to a quantity surveyor about getting a depreciation schedule.

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