Owning an investment property allows you to claim all the expenses relating to your investment property as a tax deduction. The most common deductions are interest on your loan, agent fees, strata (if any), council rates and general upkeep of the property.

There is also another large expense you can claim, that many investors usually don’t claim. That is depreciation. Seasoned property investors will know depreciation, but most people don’t claim deprecation on their investment property.

What is depreciation?

Depreciation, as the name suggests, is the devaluing of your asset. Particularly in the structure of the property and permanent fixtures and fittings in your property. Even though the overall value of your home may increase, the value of your structure or fittings depreciate over time. Think an ovens value depreciates the longer you have it. The ato allows you to claim the amount the oven has depreciated in that financial year. When you apply this to other fittings like carpets, appliances, light fittings etc. the amount you can claim can add up.

Here’s what you need to know about claiming depreciation