Depreciation Schedule Estimator for Australian Rentals

Understanding Property Depreciation for Investors

Depreciation is the decline in value of a property’s building structure and plant & equipment (fixtures). As an investor in Australia, you can claim this decline in value as a tax deduction under ATO rules, helping to reduce your taxable income and improve after-tax returns.

What This Depreciation Calculator Does

• Estimates annual depreciation based on the value of the building and fittings
• Applies a 2.5% capital works deduction rate (for buildings built after 1987)
• Assumes diminishing value method for plant & equipment depreciation at 20%
• Outputs total deduction over selected years

Example

If your property was purchased for AUD 550,000, with AUD 25,000 allocated to fixtures, and the building is 5 years old, this tool helps you estimate capital works and asset depreciation over the next 10 years.

How Depreciation Helps You

• Reduces taxable income from rental income
• Improves after-tax cash flow
• Delays tax payments without impacting property value

ATO Guidelines & Notes

Capital works (building structure) are typically depreciated over 40 years. Fixtures (plant & equipment) depreciation follows either prime cost or diminishing value methods. Only properties built after July 1985 are eligible for building deductions, and post-May 2017 second-hand fixtures may not be deductible unless newly installed.

Disclaimer: This tool is for estimation only. For full tax compliance and reporting, consult a qualified quantity surveyor or tax accountant. Refer to official ATO guidance at ato.gov.au.