Case study:
Small industrial shed purchased for $650,000

The tables below outline Michael’s scenario before and after he made the depreciation claim:

An industrial shed purchased for $650,000
Scenario without depreciation claim
Annual income ($1,122 x 52 weeks) $58,344
Annual expenses $75,035
Pre-tax cash flow (expenses less income) -$16,691
Total taxation loss -$16,691
Tax refund (tax loss x tax rate of 47%) $6,176
Annual costs of the investment property (pre-tax cash flow + tax refund) -$10,515
Weekly cost of the investment property -$202
Scenario with depreciation claim of $29,850
Annual income ($1,122 x 52 weeks) $58,344
Annual expenses $75,035
Pre-tax cash flow (expenses less income) -$16,691
Total taxation loss (pre-tax cash flow + depreciation) -$46,541
Tax refund (tax loss x tax rate of 47%) $17,220
Annual cash flow of the investment property (pre-tax cash flow + tax refund) $529
Weekly cash flow of the investment property $10
Difference of $212 per week

By using a BMT Tax Depreciation Schedule, Michael maximised the tax depreciation deductions found for his industrial shed and improved his weekly cash flow position by $212.


Assumptions and disclaimer

Case studies and figures are based upon tax depreciation schedules completed by BMT Tax Depreciation and do not represent any particular person or investment property scenario. The information provided is a general guide and does not constitute financial, legal or taxation advice. All figures are supplied as examples and may not represent your personal circumstances.

You acknowledge and agree you must undertake your own analysis and obtain independent legal, financial and taxation advice before using, relying or acting on any information supplied on this website.

Neither BMT Tax Depreciation, nor its directors, shareholders or advisors make any representation or warranty as to the accuracy or completeness of information found in these typical examples. Nor will they have any liability to you or any other party for any representations (expressed or implied) contained in, or any omissions from, that information.

The tax depreciation deductions in this case study have been calculated based on the diminishing value method of depreciation and are based upon a first full year of ownership. Marginal tax rates relevant to 2014 – 2015 financial year have been assumed.

Related case studies:
Industrial warehouse purchased for $1,000,000

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As you can see, property depreciation can make a significant difference to a property investor’s cash flow each financial year.

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It’s that simple. A depreciation schedule could save you thousands each financial year.
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