Case study:
An old townhouse purchased for $690,000

The following scenario shows Mary’s cash flow both with and without a depreciation claim.

An old townhouse purchased for $690,000
Scenario without depreciation claim
Annual income ($595 x 52 weeks) $30,940
Annual expenses $45,795
Pre-tax cash flow (expenses less income) -$14,855
Total taxation loss -$14,855
Tax refund (tax loss x tax rate of 37%) $5,496
Annual costs of the investment property (pre-tax cash flow + tax refund) - $9,359
Weekly cost of the investment property -$180
Scenario with depreciation claim of $7,200
Annual income ($595 x 52 weeks) $30,940
Annual expenses $45,795
Pre-tax cash flow (expenses less income) -$14,855
Total taxation loss (pre-tax cash flow + depreciation) -$22,055
Tax refund (tax loss x tax rate of 37%) $8,160
Annual cash flow of the investment property (pre-tax cash flow + tax refund) -$6,695
Weekly cash flow of the investment property -$129
Difference of $51 per week

Before claiming depreciation, Mary experienced a loss of $180 per week for the first year of ownership for her property. Simply by claiming depreciation, Mary was able to turn her cash flow into a more positive one, and reduce her loss to $129 per week. In total, BMT Tax Depreciation helped Mary to save $2,664 in her first year. Mary plans to renovate her property within twelve months, which will enable her to increase the rental potential and claim further depreciation deductions for her property.


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.

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A new townhouse purchased for $890,000

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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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Property details

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Your schedule will be available within 5 – 7 days of all information being gathered. BMT can even forward your schedule to your Accountant directly, saving you time.

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