Crucial Property Tax Deductions for EOFY 2025 – Are You Ready?

As the End of Financial Year approaches, it is time for property investors to get their finances in order. Whether you own property individually or through a business, now is the moment to claim all eligible deductions, especially tax depreciation, a powerful but often overlooked way to boost your cash flow.

What is Tax Depreciation?

Tax depreciation allows you to claim deductions for the wear and tear on your investment property and its assets. It applies to both residential and commercial properties and can significantly reduce the tax you owe.

A tax depreciation schedule, prepared by a registered quantity surveyor, outlines the deductible value of:

• Capital works (e.g., walls, roofs, windows)
• Plant and equipment (e.g., carpets, appliances, air conditioners)

This schedule is a one-off cost and can provide deductions for up to 40 years, equivalent to a rate of at least 2.5%.

Who Should Get a Depreciation Schedule?

If you own an income-generating property, residential, commercial, or industrial, you can benefit. Even older properties can offer deductions, especially if you have done renovations or upgrades like new kitchens or bathrooms.

Specific groups who can benefit:

• Home-based businesses: Claim on a portion of furniture, tech, or renovations used for business.
• Property developers & small business owners: Claim on construction, fit-outs, and equipment.
• SMSF trustees: Claim on investment properties owned by self-managed super funds.

Financial Benefits

Improves annual cash flow by reducing taxable income.

If you missed claims in the past, you may be able to amend up to two years of returns.

New build-to-rent projects may qualify for an increased 4% capital works deduction (previously 2.5%).

EOFY Checklist: What to Do Now

• Get your documents ready, including contracts, renovation receipts, and asset purchase records.
• Engage a quantity surveyor to prepare or update your depreciation schedule.
• Collaborate with your accountant to review all deductions.
• Finish repairs before EOFY to claim them this year.
• Prepay expenses (interest, insurance) if eligible to bring forward deductions.
• Review build-to-rent eligibility for higher deduction rates.
• Catch up on missed deductions by discussing amendments with your tax agent.
• Settle any ATO debts to avoid extra charges.
• Keep all receipts and income/expense records for your tax return.
• Lodge all returns on time to avoid penalties.

Common Questions

Can I claim on an older property?
Yes, especially if you have renovated or replaced assets.

What qualifies as plant and equipment?
Things like appliances, hot water systems, air conditioning, carpets, and blinds.

Is a depreciation schedule worth it?
Absolutely, it is a one-off cost with long-term benefits for your cash flow.

What if I missed a claim?
You may be able to amend your tax return for the past two years.

How does a tax agent help?
They ensure compliance, find every deduction you are entitled to, and lodge everything on time.

Call to Action

Maximise your tax savings and boost your cash flow before June 30 by claiming every eligible deduction, especially depreciation. LINK Advisors works with DuoTax, to provide special pricing for its client to obtain Tax Depreciation Reports. If you would like to understand more on how to maximise your investment property deductions, please contact us and we can assist you.