Unlocking Tax Savings: What Is A Quantity Surveyor Depreciation Report?

If you own investment property in Australia, there’s one tool that could quietly be boosting your bottom line, it’s called a Quantity Surveyor Depreciation Report, and it could mean thousands of dollars in tax savings every year.

What is it exactly?

A Quantity Surveyor Depreciation Report, also known as a Tax Depreciation Schedule, is a detailed breakdown of how much value your investment property loses over time due to wear and tear. This includes both the building itself and the assets inside it, like carpets, appliances, and air conditioners.

The report is prepared by a qualified quantity surveyor, a professional trained to estimate construction costs and asset values. Quantity surveyors’ reports are recognised by the Australian Taxation Office (ATO) as a valid way for claiming depreciation deductions.

What is the significance?

In Australia, the ATO allows property owners to claim depreciation as a non-cash tax deduction. That means you can reduce your taxable income without additional spending – just by owning a property that naturally depreciates over time.

The depreciation report typically covers two categories:

• Division 43 (Capital Works): Structural elements like walls, roofs, and concrete.
• Division 40 (Plant and Equipment): Items like ovens, blinds, and hot water systems.

It is worth noting that since 2017, second-hand residential properties have limited eligibility for these claims.

What are the main benefits?

• Bigger Tax Deductions: Claim additional depreciation tax deductions each year, reducing your taxable income.
• Better Cash Flow: Less tax means better cashflow to go towards other costs such as for mortgage repayments or reinvestment.
• ATO Compliance: Professionally prepared reports ensure you’re claiming correctly.
• Retroactive Claims: Missed out in previous years? Prior Tax Returns may be able to be amended to claim and recover the deductions.
• Applicable to most properties: Typically, newer properties have greater claims however it is worthwhile considering as most properties will have some depreciation value available. Quantity surveyor reports are relevant for both residential and commercial properties.

What is the cost?

Depreciation reports tend to be a one-off upfront cost which is usually tax deductible. The cost generally depends on the complexity of the property, however typically range from $700- $800 plus GST for a residential property and commercial property tends to be higher. A quantity surveyor can usually provide a cost upfront on preparing the report depending on your specific property as well as an estimate of the depreciation benefits.

Final Takeaway

A Quantity Surveyor Depreciation Report is a worthwhile consideration for maximising the tax position of property owners. Thinking about getting one? Reach out to a qualified quantity surveyor – and let the team at Bentleys Victoria guide you through the tax side of the equation.

Want to know more about how Bentleys can help you?

Contact Bentleys today for a consultation with one of our expert tax advisors who can offer tailored advice specific to your industry, business structure, and growth ambitions. With the right strategic tax partner, you can turn tax management from a necessary obligation into a competitive advantage. We’re here to help you get where you want to be.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.