Depreciation Schedules = Tax Deductions
When you own a commercial investment property, the rent you receive is taxable income.
Because that income is taxable, the Australian Taxation Office allows deductions for the cost of constructing the building and installing the assets within it. Those deductions are claimed over time through Depreciation.
A Depreciation Schedule calculates those deductions and sets out what can be claimed each year.
For many commercial properties, particularly newer or refurbished assets, the deductions can be substantial.
What Can Be Claimed in a Commercial Property?
Commercial properties are made up of multiple components that may qualify for depreciation.
These generally fall into the following areas:
The Building
The structural elements of the property — such as concrete, steel, roofing, walls and other fixed construction components — may be claimable over time.
Plant and Equipment
Assets within the property such as air conditioning systems, lifts, lighting, security systems, mechanical services and other installed items may also be claimable.
Fit-Out and Improvements
Offices, medical suites, retail tenancies and hospitality venues often contain significant fit-outs. Refurbishments and improvements can also create additional deductions.
Each property is different. A depreciation schedule identifies what applies to that specific asset and calculates the deductions available.
Why Depreciation Matters in Commercial Property
Depreciation directly affects an investor’s after-tax return.
For agents and advisors, this can be important when:
Preparing an Information Memorandum
Marketing an investment asset
Discussing yield and net return
Supporting a purchaser’s due diligence
Advising owners before refurbishment
Despite this, very few commercial listings reference depreciation benefits, even though it is often one of the largest deductions available on the property.
Understanding what is available allows you to present a clearer and more complete investment picture.
For owners of commercial investment property, depreciation can have a meaningful impact on the overall return of the asset.
A properly prepared depreciation schedule can:
Reduce taxable income each year
Improve after-tax cash flow
Identify deductions from past construction or refurbishment works
Clarify which assets belong to the owner and which belong to the tenant
Account for owner contributions and fit-out incentives
Commercial properties often involve multiple parties and multiple stages of construction or refurbishment. Understanding how those costs are treated for Depreciation purposes is important.
A detailed Schedule allows you and your accountant to make informed decisions about holding, refurbishing or selling the asset.
Why Engage a Quantity Surveyor?
Depreciation schedules for property must be prepared by a suitably qualified professional.
A Quantity Surveyor specialises in construction costing. In simple terms, we:
Assess the property and its components
Determine what it would have cost to construct the building in the year it was built
Break that cost down into the individual elements of the structure and installed assets
Apply the appropriate depreciation rates to each component
Calculate the deductions available each year going forward
This process requires an understanding of building construction, materials and commercial fit-outs.
R24 prepares detailed, ATO-compliant depreciation schedules for commercial property across Australia. Our role is to identify what can be claimed and calculate it correctly, so your client — and their accountant — can rely on the figures with confidence.
If you are preparing to market a commercial investment property, we can provide a free estimate of the likely depreciation available.
This allows you to:
Give prospective buyers a clearer understanding of the tax deductions attached to the property
Support discussions around after-tax returns
Strengthen your Information Memorandum
Differentiate your listing with meaningful financial insight
We see this as part of our commitment to supporting commercial agents and advisors with practical tools that strengthen investor conversations.
Depreciation is often one of the largest deductions available on a commercial property, yet it is rarely referenced in listings.
There is no obligation. Simply provide the property address and basic details, and we will review it.