Apparently, your investment property will wear and tear. The ATO allows Quantity Surveyors to calculate a deduction from this wear and tear; therefore, you could claim it in tax return annually.

You can claim the depreciation deduction under two categories:

1. Capital works deductions: it refers to the building’s structure and items considered to be permanently fixed to the property such as kitchen cupboards, doors, and sinks. That value can claim as an immediate 100% deduction and it possibly results in significant tax savings.

For example, a 25-year-old kitchen could still generate a full deduction of around $5,000.

You are able to claim depreciation on all new items when the renovation is completed.

2. Plant and equipment depreciation: it is called ‘repair’ which refers to a situation where an investment property asset is returned to its original state to retain its value. You can claim an immediate 100% deduction of the repairs in the year of expense.

YOU DON'T HAVE TO SPEND MONEY TO BE ELIGIBLE TO CLAIM IT

Property depreciation is the largest tax deduction after interest and a non-cash deduction, and you do not have to spend money to be eligible to claim it.

You can possibly claim a tax return up to thousands from any income-producing property, which significantly boosts your cashflow

Especially, besides allowing you to claim tax depreciation, ATO also allows you to amend previous tax returns to claim missed depreciation deductions.