What Is a Depreciation Schedule for a Property?
If you’ve been researching property investment, negative gearing, or tax deductions, you’ve probably come across the term “depreciation schedule”.
While it sounds technical, a depreciation schedule is actually a very practical document that helps property investors understand what they can legally claim at tax time.
Here’s a simple explanation of what a depreciation schedule is, what it includes, and why it matters.
What Is a Depreciation Schedule?
A depreciation schedule is a detailed report that outlines the depreciation deductions you may be able to claim for an investment property over time.
It itemises the parts of the property that are eligible for depreciation and shows how much of that value can potentially be claimed each year.
In simple terms, it’s a roadmap that helps your accountant work out what depreciation deductions apply to your property.
Why Does a Property Have Depreciation?
Over time, buildings and assets wear out.
The tax system recognises this wear and tear by allowing investors to claim depreciation on certain parts of an investment property.
Rather than claiming the full cost upfront, depreciation spreads that cost over a number of years.
What Does a Depreciation Schedule Usually Include?
A depreciation schedule typically breaks deductions into two main categories:
- Building depreciation – where eligible, this relates to the structure of the property
- Fixtures and fittings – such as appliances, flooring, air conditioning, and other items that wear out over time
Each item is listed with its estimated value and the amount that may be depreciated each year.
Why Is a Depreciation Schedule Important?
Without a depreciation schedule, many investors miss out on deductions they’re entitled to.
The schedule provides clarity and documentation, making it easier for your accountant to apply the correct deductions when preparing your tax return.
Because depreciation is a non-cash deduction, it can improve the after-tax position of an investment without affecting cash flow.
Is a Depreciation Schedule a One-Off Document?
In most cases, a depreciation schedule is prepared once and then used year after year.
The schedule usually covers a long period (often decades), showing how deductions change over time as assets depreciate.
Unless you make significant changes to the property, the same schedule can continue to be used.
Who Prepares a Depreciation Schedule?
A depreciation schedule is typically prepared by a qualified quantity surveyor or specialist provider.
Your accountant will then use that schedule when completing your tax return.
Tax professionals such as
The Accountants
can advise whether a depreciation schedule is appropriate for your property and how it should be applied.
How Does a Depreciation Schedule Link to Negative Gearing?
Depreciation is often discussed alongside negative gearing because it can increase the size of a tax-deductible loss without increasing actual cash costs.
This can reduce taxable income and help manage the after-tax cost of holding an investment property.
However, depreciation should support a sound investment — not be the sole reason for buying a property.
Depreciation Doesn’t Replace Good Cash Flow
While a depreciation schedule can improve tax outcomes, it doesn’t change the underlying affordability of the property.
You still need to be able to service the loan and manage expenses.
This is why finance structure and borrowing strategy remain critical.
How Chase Helps Investors Understand the Bigger Picture
While depreciation is a tax concept, the finance structure behind an investment determines whether the strategy is sustainable.
Chase Douglas has extensive experience in mortgage lending and helps investors understand how loan structure, cash flow, and tax considerations work together.
Chase focuses on ensuring the finance side supports long-term strategy — not just short-term tax outcomes.
Should You Get a Depreciation Schedule?
A depreciation schedule can be a valuable tool for many property investors — particularly those with negatively geared properties.
Understanding what it is and how it works helps you decide whether it’s relevant for your situation.
👉 Book a conversation with Chase Douglas to understand how investment lending, cash flow, and tax considerations like depreciation fit into your overall plan.
Good investment decisions are built on understanding all the moving parts.
