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Weekly Property Update #004 – 4 tips about Depreciation

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If you’re buying a property or renovating this spring season, it’s worth considering how depreciation plays into the equation. Even a couple of small decisions can have a significant pay off.

Tyron Hyde, chief executive of quantity surveying firm Washington Brown explains that there are some items that can be depreciated at 100%. Essentially, this allows you to maximise your return from the start.


Tyron Hyde-Washington Brown/ Jennifer Juke-Property Observer

It’s a way to reduce your taxable income and it’s perfectly legal

Depreciation is really about claiming the wear and tear on your property from carpets and blinds to ovens and dishwashers.

New properties have a higher rate of depreciation, and that higher developments can have more claimed on them due to lifts and structural requirements.

Developments with pools and gyms can also often see more claimed, due to a higher ratio of plant and equipment to the purchase price, and that lower priced properties have a higher depreciation ration.

Here are his four tips to remember:

  1. Individual items under $300 can be claimed immediately. If you’re buying a microwave, buy one that’s $299 instead of $319. This is better than depreciating it at the prime cost rate of 10% per annum (or $30 in the first year). That’s a 1000% increase.
  2. Big ticket items can be claimed too. If your portion of an expensive item is under $300, you can claim it. For example, a garage door costs $2,500 in a building of 10 units therefore your cost is $250. This amount can be depreciated immediately.
  3. Items valued between $300 and $1,000 can be depreciated at a higher rate. Through the low value pool method, you can claim these at a rate of 37.5%. So if you bought an oven for $950 you can claim $356.
  4. Split your report to get more. If you have bought a property as a group, say with family or friends, ask your Quantity Surveyor to split the depreciation report between the investors to get more bang for your buck.

Depreciation is the only non-cash deduction available to property investors

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Image 1

Stan the man @onlyinbondi

Image 2

Courtesy @daminawandco

Image 6

Australian home designed by David Hicks

Image 7

Courtesy @Lucdesign


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I am a mother of 2 living in the Eastern Suburbs of Sydney. My two passions are Interior Design and Real Estate. I have been fortunate to have had the opportunity to work in both industries. I started off working in Interior Design assisting Interior Designer Darren Palmer which was amazing and a great experience. What I loved most was working with such a creative sole as Darren and having the opportunity to source and work with gorgeous products. From there I continued with my other passion in Real Estate. I am now a licenced Real Estate Agent with Raine and Horne Double Bay/Bondi Beach working within the Goldman team (Mark and Barry Goldman). As the saying goes:- "It's a beautiful thing when a career and a passion come together" So very true for me and I feel very fortunate to be doing something that I love everyday around my kids and that's also rewarding.

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