tax deductions

Five things to know about depreciation this tax time

With tax time fast approaching, claiming depreciation is the key to increasing cash flow from an investment property.
tax deductions

BMT Tax Depreciation has some tips for investment property owners when it comes to claiming depreciation at tax time. Below are five ways to make sure you get what is yours.

1. Don’t miss out on depreciation deductions

Property investors are entitled to a range of tax deductions which help to lower taxable income and make owning an investment property more viable.

Some of the tax deductions available include council rates, the interest from a mortgage, property management fees, land taxes, strata fees, maintenance costs, insurance, accounting fees and depreciation.

Of these deductions, depreciation is the most commonly missed.

This is because it’s a  non-cash deduction.

That is, investors do not need to spend any money to be eligible to claim it.

Research has shown 80 per cent of property investors are missing out on the depreciation deductions they’re entitled to.

To ensure that depreciation is being claimed correctly and maximised, investors should contact a specialist Quantity Surveyor, such as BMT Tax Depreciation, to organise a comprehensive depreciation schedule.

A BMT Tax Depreciation Schedule outlines all the deductions an investor can claim for their investment property. It lasts for forty years and the fee for preparing it is 100 per cent tax deductible.

During the 2017-2018 financial year, BMT Tax Depreciation found their clients an average of $8,212 in tax deductions in the first year claim alone for residential properties.

Visit BMT’s tax depreciation calculator for an estimate of the deductions you may be entitled to.

2. If you recently purchased an investment property, you can still make a claim this tax time

The Australian Taxation Office (ATO) allows investors to claim depreciation based on the number of days a property was available for lease.

A BMT Tax Depreciation Schedule makes partial year claims like this easy for the property investor and their accountant and can pro-rata deductions based on the percentage of time the property was available for rent.

3. Have you made improvements? Don’t forget to update your tax depreciation schedule

If improvements have been made to the property in the past financial year, like a renovation, it’s a good idea to get in touch with a Quantity Surveyor to see if you will require an updated depreciation schedule.

It’s important to be aware there is a difference between a repair and a capital works improvement, as this will affect the claim. The cost of any repairs can be claimed in full in the same financial year they are completed.

An improvement, on the other hand, is when you improve the condition of an item or property beyond that of when it was purchased. Such improvements are capital in nature and must be depreciated over time.

For this reason, if any renovations or improvements have been made to the property in the last financial year, the property investor should seek the advice of an experienced Quantity Surveyor to ensure their deductions are claimed correctly.

Find out more about BMT Tax Depreciation by visiting their website.

An updated tax depreciation schedule may be required after a renovation to capture all newly installed plant and equipment assets or capital works expenditure.

4. Discuss tax depreciation deductions with your accountant

An accountant will often refer property investors to a Quantity Surveyor or contact them on your behalf to arrange a schedule.

While they can process the deductions, they can’t estimate construction costs to provide you with the tax depreciation schedule.

Only a qualified Quantity Surveyor can do that.

Quantity Surveyors are one of the few professionals recognised under Tax Ruling 97/25 to have the appropriate construction costing skills to estimate building costs for depreciation.

However, not all Quantity Surveyors specialise in tax depreciation.

Only a tax depreciation specialist like BMT can be relied on to maintain detailed knowledge of all current ATO Tax Rulings relating to depreciation.

Once a tax depreciation schedule has been completed, an Accountant will input these deductions into the property investor’s annual income tax return.

5. Amend previous tax returns and don’t miss out on claiming past years’ deductions

Investment property owners often enquire about a property they have owned and rented for a number of years and they haven’t claimed depreciation deductions before.

The ATO allows tax returns to be easily adjusted for two years after the initial submission. This enables property owners to recoup some of the deductions that may have been missed.

It’s important to note a separate application will need to be submitted for each financial year requiring an amendment.

Income, depreciation and other claims made will impact the outcome of each tax return.

If you have missed or not maximised your claim in previous years, the depreciation schedule can be tailored within the eligible years.

BMT offers a guarantee to all clients that if we can’t find double our fee in deductions in the first full financial year, we won’t charge for our service.

To learn more about depreciation, visit the tax depreciation overview page on the BMT Tax Depreciation website.



Source: The Real Estate Conversation 7th May 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

an investor profile

Depreciation: an Investor Profile

An investor profile defines an individual’s preferences in investment decisions. An investor has purchased a property for $420,000 and is receiving $490 per week in rent for a total income of $25,480 per annum. The estimated expenses for the property include interest, rates and management fees, which total $32,000 per annum. The following scenario shows the investor’s cash flow with and without depreciation. A typical $420,000 unit will show a total deduction of $11,500 in the first full financial year.

In this example the investor uses property depreciation to go from a negative cash flow scenario, paying out $79 per week, to a positive cash flow scenario, earning $3 per week on the property. By claiming depreciation this investor will save $4,255 for the year.

To find out how depreciation can benefit you contact the expert team at BMT Tax Depreciation on 1300 728 726 or visit the residential property depreciation page on the BMT website.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. 
Please contact 1300 728 726 or visit for an Australia-wide service.

missed deductions

Missed Deductions Add Up

Our system to maximise your claim

Closed circuit television systems, garden watering systems, intercom systems and solar powered generating system assets are all assets which are often missed by property investors when claiming depreciation.

These and other missed assets such as door closers, freestanding bathroom accessories, garbage bins, shower curtains and smoke alarms are part of a list we have compiled to help investors avoid missed depreciation deductions.

Although many of these items have a low depreciable value, as shown in the following table, the depreciation deductions which can be claimed for these items can add up to thousands of dollars for an investor.

 So here’s our system to help investors ensure no item is missed and to maximise their depreciation deductions:

  1. Take note of the assets included in the above table

  2. If you have a depreciation schedule and you own any of these assets, confirm with your Accountant that they are included in your schedule and your depreciation claim. If items have been missed, the Australian Taxation Office will allow you to go back and amend the previous two years of missed deductions

  3. If you don’t have a depreciation schedule you should talk to a specialist Quantity Surveyor as soon as possible

  4. Ensure your specialist Quantity Surveyor can outline the deductions available for assets which are eligible to be written off immediately or added to the low-value pool

A specialist Quantity Surveyor will use their expert knowledge of tax legislation to ensure the maximum deductions are claimed for each individual asset.

Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. 
Please contact 1300 728 726 or visit for an Australia wide service.