How to Use Depreciation Schedules to Maximise Year-End Tax Benefits

As the financial year draws to a close, property investors—especially Aussie expats and offshore businesses with Australian assets—need to consider one powerful tool to reduce taxable income: the depreciation schedule.

At Worldwide Advisory, we help investors around the globe optimise their tax strategies, ensuring their investment properties are not only profitable, but also tax-efficient. A properly structured depreciation schedule is one of the most underused, yet most effective, year-end planning tools available.

What Is a Depreciation Schedule?

A depreciation schedule is a report that outlines the decline in value of a property’s structure (capital works) and its assets (plant and equipment) over time. This decline is a legitimate expense under Australian tax law and can be deducted against rental income, lowering your taxable income.

There are two main components:

• Division 43: Capital Works Deductions – Applies to the building structure, renovations, and permanent fixtures (available for buildings constructed after 16 September 1987).

• Division 40: Plant and Equipment Deductions – Covers items like carpets, blinds, appliances, and air conditioning systems (subject to changes for second-hand properties purchased after 9 May 2017).

Why Depreciation Matters—Especially at Year-End

If you haven’t had your property assessed or your schedule updated, you could be missing out on thousands in tax deductions. As part of your year-end tax planning, reviewing and claiming depreciation ensures you’re minimising your tax liability and keeping more cash in your pocket.

For expats and international investors, depreciation becomes even more vital. Why? Because:

• Rental income remains taxable in Australia, even if you're living or operating overseas.

• Claiming maximum deductions reduces that tax burden.

• ATO audits are increasing for rental properties—especially among non-residents. Having a valid schedule shows diligence and accuracy.

When to Review or Update Your Schedule

Depreciation schedules aren’t always “set and forget.” Here’s when to take a closer look:

1. New Purchase or Construction

If you’ve recently acquired a property, arrange a Quantity Surveyor’s inspection immediately—before the tenant moves in, if possible.

2. Renovations or Upgrades

Any improvements to the property—like kitchen updates, bathroom overhauls, or replacing appliances—may entitle you to additional depreciation.

3. Ownership Structure Changes

If you’ve restructured into a company, trust, or offshore entity, confirm whether the depreciation rules apply differently under your new setup.

4. Before 30 June

The best time to review is before the end of the financial year, so you can:

• Ensure all new assets are accounted for.

• Maximise your deductions in the current year.

• Make strategic decisions about timing future upgrades or claims.

Common Mistakes to Avoid

• Relying on estimates or DIY calculations – Only registered Quantity Surveyors can prepare ATO-compliant reports.

• Failing to update the schedule after renovations or structural changes.

• Overlooking older buildings – Even if the structure itself isn’t depreciable, the plant and equipment still might be.

A Note for Aussie Expats and Foreign Businesses

Whether you’ve ceased Australian tax residency or are operating from abroad, depreciation remains a powerful deduction—but only if properly structured and compliant with local and international tax rules. Our team at Worldwide Advisory specialises in:

• Cross-border property ownership

• Foreign income reporting

• ATO audit protection

• Repatriation and CGT planning

Don’t Miss the Deadline

With 30 June fast approaching, now is the time to act. A single depreciation schedule can provide annual tax benefits for up to 40 years—so why leave money on the table?

📞 Call us today at +617 3180 1684

📧 Or email contact@worldwideadvisory.au

Let Worldwide Advisory guide you through your year-end tax strategy and ensure your investment property is working smarter, not harder.