Property depreciation is one of the most underutilised tax benefits available to Australian investors — yet it can have a huge impact on your cash flow and long-term returns.

We’re all about helping everyday Australians unlock the full potential of property investment. And that starts with understanding powerful tools like depreciation.

What Is property depreciation?

Property depreciation is a tax deduction recognised by the Australia Tax Office (ATO) that allows investors to account for the wear and tear of a property and its assets over time. You can claim depreciation in two key areas:

  • Capital Works:
    This refers to the building structure itself – including walls, roofs, the slab and everything in between. Residential properties built after 15 September 1987 may be eligible for up to 40 years of deductions.

  • Plant and Equipment:
    These are removable items within the property such as carpets, air-conditioners, ovens, and other appliances. These assets can be depreciated over their effective life.

By claiming depreciation, you can reduce your taxable income – which means less tax and more money in your pocket.

Why new builds are stronger for depreciation

Thinking about building or buying new? You’re on the right track.

Newly built properties offer the most significant depreciation benefits, including:

  • Maximum deductions: New homes allow you to claim full depreciation on both the structure and the included fixtures.

  • Full 40-year Capital Works claims: The clock starts fresh, giving you access to decades of tax deductions.

  • Modern assets = more value: Brand new appliances and fittings result in higher Plant and Equipment deductions.

Example: The value of depreciation

Let’s say you purchase a brand new investment property worth $500,000. A qualified quantity surveyor prepares a depreciation schedule estimating $10,000 in annual depreciation.

If you’re on a 37% marginal tax rate, that could save you $3,700 in tax every year.

Over 10 years? That’s $37,000 saved — just through depreciation.

Ready to Make Property Work for You?

Locale Wealth specialises in sourcing high-performing properties and guiding clients through the tax benefits that come with them – like depreciation.

This is just one example of the tax advantages our clients experience through smart property investing.

Want to learn how property investment could work for you? 👉 Reach out to the Locale Wealth for an obligation free discovery call.