Back to Inspire Home

Ask an expert: What is depreciation, and how can it benefit me?

I’ve learnt a lot in my career. Coming from a property background, I started out in a project marketing group, and have spent the last 4 years as a tax depreciation specialist and keynote speaker for one of the largest Quantity Surveying firms in Australia.

Thanks to the ever-changing nature of the finance industry, however, it seems there is always much to learn. I know-first hand that it can be difficult to keep up with all the concepts and inner-workings of the property investment world.

Something property investors often don’t know about is what’s called ‘depreciation.’ This is the tax deduction available to investors when the value of an asset - an investment property in this case - declines over time due to wear and tear.

You can claim depreciation on anything from the building structure (depending on when it was first built), to carpets, to blinds, right down to the light fittings and smoke alarms. How much you can claim will depend upon a number of things, including the building type (residential, commercial or industrial), the age of the property and its features.

Technically, depreciation constitutes a loss of potential income, so by claiming depreciation you will pay less tax, therefore increasing the cash flow from your investment property.

Looking to make some extra rental income? Find a great investment loan rate with Lendi.


As boring as it sounds, I am quite passionate about the subject (who wants to be throwing money away?!). I see so many property investors missing out on thousands of dollars every year because they either were unaware, or didn’t know how to take advantage, of this tax deduction. In fact, statistics from the Australian Taxation Office (ATO) show that around 80% of investors don’t claim depreciation.

Savvy investors are generally aware of the benefits, and your accountant should ensure you have a report. However, it’s not a widely known or advertised benefit. If you’re just hearing about it now, the good news for investors who’ve missed out on depreciation in past years is that the ATO allows you to amend your previous two financial years’ claims.

It is vital to have a depreciation schedule produced so that you can claim exactly what you’re entitled to on your tax return. I suggest seeking the advice of an accountant, who should refer you to a specialist Quantity Surveyor, rather than choosing to DIY your depreciation claims.

A Quantity Surveyor will be able to ensure you get the most money back. Recent data released by the ATO shows that Australian property investors claimed an average of $3,292 in depreciation deductions in the income year. On the other hand, investors who engaged a quantity surveying firm to produce a depreciation schedule had a much higher average claim of around $9,000.

Might I add, a tax depreciation schedule is a tedious, complicated report, and if you forget things or miscalculate, you could find yourself out of pocket, and potentially in trouble for tax evasion. With a Quantity Surveyor, you’re safe if the ATO ever audits you, and you’ll be claiming on items you never thought possible. In other words - leave it to the pros!

Looking for more expert advice? Have a look at these 5 expert steps towards buying a house.

About the author: Alannah Browne is a resident Home Loan Specialist here at Lendi and has worked in the property industry for the majority of her professional life. Being passionate about health and wealth, her interests include cooking, fitness and business.

Looking for a simpler type of home loan? Apply today and get approved faster.

Tags: property, depreciation, investing

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates

Check today's low rates

Tell us what you are looking for and see if you can save.

Search rates
Home loan repayment saver tool

Home loan repayment saver tool

Enter a few details about your home loan and see how much you could save on your repayments

Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
Made with love at Circular Quay in Sydney, Australia. © 2021. All rights reserved.