CLAIMING PROPERTY DEPRECIATION is paramount for commercial business owners. And yet, research suggests around 80% fail to maximise the deductions available to them.

As a result, they miss out on thousands of dollars.

With a commercial property, both owners and tenants are eligible to claim depreciation deductions simultaneously, so it’s important that both parties contact a specialist quantity surveyor to organise a tax depreciation schedule. 

A depreciation schedule will outline all available deductions over the life of the property. 

Under Tax Ruling 97/25, quantity surveyors like BMT Tax Depreciation are one of the only professions qualified to estimate construction costs for depreciation purposes.

Case Study: A $820,000 Commercial Office Building 

Justin’s company owns a commercial office building purchased for $820,000 and rented for $1,050 per week or $54,600 per annum. 

Expenses for the property including interest, rates, property management fees, repairs and maintenance total $57,088. 

Without depreciation, Justin’s company is experiencing a loss of $34 per week on the commercial office building.

Justin contacted BMT Tax Depreciation and found his business could claim $40,080 in depreciation deductions for the property in the first financial year alone. 

The following table shows Justin’s scenario before and after his company made the depreciation claim for the property.

By claiming depreciation, Justin improved the loss of $34 per week on the company’s property to a return of $198 per week. This improved the tax refund for the property by $12,024 in the first financial year.   

Maximise your tax return with property depreciation

As the case study shows, claiming property depreciation deductions can have a significant impact on a commercial business owner’s cash flow position. 

Bottom Line: A BMT Tax Depreciation Schedule details all available deductions over the lifetime of a property to ensure investors maximise their cash flow. Schedules have a one-off fee; and are totally tax deductible.