• P: 1300 790 110 | E: service@redwoodadvisory.com.au

Property Depreciation Schedule for SMSF

property depreciation schedule

SMSF Property Investors – Don’t overlook the benefits of Property Depreciation Schedule

The question of SMSF Depreciation comes up a lot with our clients. Redwood Advisory encourages clients to obtain a SMSF Property Depreciation Report to claim deductions where possible.

Which expenses can I claim?

SMSF Properties are entitled to claim depreciations when they complete their annual tax return. Some of the deductions by investors include body corporate fees, agent fees and commissions, council rates, borrowing expenses, interest on loans, repairs and maintenance, gardening expenses. Importantly, SMSF Administration fees are deductible.

Many people believe depreciation applies only to new properties. In fact, the owners of any investment property are likely
to be able to claim something. Depreciation is a ‘non-cash’ expense that represents the decline in value of an asset due to its use over time. Even though it is not needed to take real cash out of your pocket, this ‘non-cash’ amount still can become tax effective.

How the property depreciation can benefit your SMSF

There are two types of deductions for SMSF Property Depreciation, they are capital works deductions and plant and equipment depreciation.

Under the Division 43 ,you may be able to claim a deduction for the construction costs of your property over a 25-year or 40-year period (a capital works deduction).

Under Division 40, you can claim a deduction for the decline in value of certain items, known as depreciating assets, that you acquired as part of the purchase of your property or that you subsequently purchased for your property. Examples of depreciating assets are freestanding furniture, stoves, washing machines and television sets.


The above deductions may indicate that the newer the SMSF Property, the greater the deductions the SMSF can claim.

Depreciation claimed as a expense reduces your taxable income by the equivalent amount, yes there is a upfront cost to appoint a quantity surveyor however the depreciation saving is worth it. A Quantity Surveyor Report can cost between $350 and $700. Remember, the depreciation expense reduces taxable income and improves SMSF cash flow.

Depreciation Schedule – Evidence required

ATO requires precise evidence of the claim item’s cost. If these are not available, a formal written report is required to value the actual amount. This report must be prepared by a Quantity Surveyor. The benefits of depreciation schedule for your SMSF Property is clear, that is claim depreciation expense and reduce your taxable income. Yes, there is a minor cost to appoint a Quantity Surveyor, however, the cost is quickly outweighed by the benefits of the depreciation report.

Important Disclaimer : This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal financial. Please consider the appropriateness of the information in regards to your personal circumstances.

  • 0
Author Image

Ivan Filipovic

Ivan Filipovic is an experienced, independent Property, SMSF and Finance Expert and the founder of Redwood Advisory. Ivan has been educating and coaching investors for over 15 years and has built a successful property portfolio with a number of positive geared properties across Australia.  Ivan provides valuable and honest guidance by educating Australians on how to invest successfully protect yourself with knowledge, contact Ivan today for a complimentary consultation on 1300 790 110 or email ivan@redwoodadvisory.com.au

All stories by: Ivan Filipovic