Depreciation schedule
A report from a quantity surveyor listing every depreciable item in your property and what you can claim each year.
A depreciation schedule is prepared by a qualified quantity surveyor who inspects the property and assigns values and effective lives to the building and its fittings. It then sets out the deduction available for each of the next forty years.
Your accountant generally cannot estimate construction costs themselves — the ATO requires a suitably qualified professional where actual costs are unknown. This is why the schedule is a separate engagement.
The cost of the schedule is itself tax deductible, and it is typically a one-off. For most investment properties it uncovers several times its cost in the first year alone.
A one-off cost with a long payback
A schedule costing around $700 might reveal $9,000 of first-year deductions. At a 37% marginal rate that is roughly $3,330 of tax saved, in year one, from a fee that is itself deductible.
The bit people get wrong
Many investors skip the schedule on older properties assuming there is nothing to claim. Capital works deductions can still apply to structural improvements made by previous owners, and renovations you cannot see are often worth thousands.
Common questions
When should I get a depreciation schedule?
As soon as the property is available for rent. It can be backdated by amending prior returns, but getting it early avoids the extra work and lost deductions.
Do I need a new one every year?
No. One schedule covers the life of the property. You only need it updated after significant renovations that add new depreciable assets.
Is it worth it for an older property?
Often yes, particularly if the building has been renovated at any point. A reputable surveyor will tell you upfront if the likely deductions do not justify the fee.