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How much depreciation can I claim on a new house ?

Have you always wondered how much depreciation or tax deductions you could claim back ?

It really depends on the type of house, location, size etc but it is always based on the construction cost to build, you cannot claim on land, developers profit, demolition or bulk excavation . If its a new house in a new subdivision and you got a builder to build for you, then this is a simple calculation by just looking at the Builders contract and the scope of works, its best to get a Quantity Surveyor to do this as they have the necessary skills and knowledge. A typical example would be a house that we have just recently done a tax depreciation schedule for in Springfield Lakes. Springfield Lakes is a popular new area with lots of new housing being built, the property that we inspected was a typical 4 bedroom single storey house, 190 m2 area on a small sloping site . The total amount of the contract works that was deductible came to $260,000, based on a first full financial year the owner was able claim back.

Year 1 $8,835.00
Year 2 $8,382.00
Year 3 $7.580.00
Year 4 $7,313.00

This was based on the diminishing value method which is an accelerated method of depreciation, it doesn’t mean you get more deductions, just more upfront in the first few years. So in year one the investor was able to off-set close to $9000.00 of legitimate tax deductions, the good thing about this is its a “non cash deduction” the owner never paid out any of his own money ! an extra $9000.00 can make the difference of the property being cash flow positive or not !

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