For Australian property investors, a depreciation report is a powerful tool that can unlock significant tax benefits and enhance financial management. However, many property investors are unsure about how to obtain a depreciation report. As a qualified Quantity Surveyor, I’m here to guide you through the process of getting a depreciation report, ensuring you maximise the benefits for your investment property.

What Is a Depreciation Report?

A depreciation report, or tax depreciation schedule, is a detailed document that outlines the depreciable assets within your property and calculates the allowable depreciation deductions for tax purposes. It covers both plant and equipment (e.g., appliances, air conditioning units) and structural components (e.g., walls, roofs). A well-prepared depreciation report can help reduce your taxable income and improve your cash flow.

Steps to Obtain a Depreciation Report

**1. *Find a Qualified Quantity Surveyor*

The first step in obtaining a depreciation report is to engage a qualified Quantity Surveyor. In Australia, it is essential to choose a Quantity Surveyor who is accredited by a professional body such as:

• Australian Institute of Quantity Surveyors (AIQS)
• Royal Institution of Chartered Surveyors (RICS)

These accreditations ensure that the Quantity Surveyor has the necessary qualifications, expertise, and adherence to industry standards required for preparing an accurate and compliant depreciation report.

**2. *Contact and Engage the Quantity Surveyor*

Once you have identified a qualified Quantity Surveyor, contact them to discuss your needs. Provide them with details about your property, including its location, type, and any recent renovations or improvements. The Quantity Surveyor will explain the process, costs, and the information they require to prepare the report.

**3. *Schedule an Inspection*

The Quantity Surveyor will arrange to visit your property for a detailed inspection. During this visit, they will:

• Assess Depreciable Assets: Identify and document all plant and equipment (e.g., appliances, carpets) and structural components (e.g., walls, ceilings).
• Review Documentation: Examine any available records, such as invoices, receipts, and construction documentation, to determine the original cost of the assets.

**4. *Prepare the Report*

After the inspection, the Quantity Surveyor will compile the data into a comprehensive depreciation report. This includes:

• Detailed Asset Schedules: Lists of depreciable assets, their original costs, effective lives, and depreciation amounts.
• Depreciation Calculations: Detailed calculations using the appropriate methods (e.g., Prime Cost Method, Diminishing Value Method).
• Building Allowances: Information on allowances for structural components and their distribution over time.
• Supporting Documentation: Invoices, receipts, and construction records to substantiate the report.

**5. *Review the Report*

Once the report is prepared, the Quantity Surveyor will provide you with a copy. Review the report carefully to understand the depreciation deductions available and how they will impact your tax return. If you have any questions or require clarification, don’t hesitate to discuss them with your Quantity Surveyor.

**6. *Use the Report for Tax Purposes*

Apply the depreciation deductions outlined in the report to your tax return. The report will help you maximise your tax benefits by accurately documenting and calculating the allowable deductions. Ensure you keep the report and any supporting documentation for your records and potential audits.

**7. *Update as Needed*

If you make significant changes to the property, such as renovations or new asset acquisitions, consider updating your depreciation report. A revised report ensures that you continue to maximise your tax benefits and accurately reflect the current state of your property’s assets.

In conclusion, obtaining a depreciation report involves engaging a qualified Quantity Surveyor, scheduling an inspection, and reviewing the prepared report. This process helps you maximise tax deductions, improve cash flow, and manage your property investment more effectively. By following these steps, you can ensure that you make the most of this valuable financial tool.

If you have any questions or need assistance with getting a depreciation report for your property, feel free to reach out. Here’s to optimising your property investments and achieving your financial goals!

Happy investing!

Mathew Kulkewycz
BWK Group
Senior Quantity Surveyor