Tax Depreciation Schedules

What a Tax Depreciation Schedule is

A Tax Depreciation Schedule enables property owners and their accountants to identify eligible depreciation deductions for capital works, plant and equipment. It sets out what the property contains, what those items are assessed to be worth for depreciation purposes, and how the resulting deductions fall across future years.

Where original construction costs are unavailable or incomplete, which is common for older buildings and for purchasers who were not the original owner, a Quantity Surveyor is the only consultant that can estimate those construction costs for depreciation purposes.

Asset Scope prepares clear schedules with practical supporting documentation. The focus is professional reporting: clear categories, clear basis and a schedule your accountant can work with.

What the schedule covers

• Capital works (Division 43) — the structural and fixed building elements eligible for deduction.
• Plant and equipment (Division 40) — the removable and mechanical items assessed separately.
• A 40 year schedule — so you never need another report unless significant upgrades are made to the property.
• Year-by-year deductions — how the schedule profiles across the years ahead.
• Both methods provided — diminishing value and prime cost, so your accountant can apply whichever suits.
• Assumptions and exclusions — what has been relied on and what falls outside the schedule.

Who it's for

Investors, accountants and advisers who need clear Quantity Surveyor-prepared depreciation reporting for income-producing property.

It is most useful where a property has recently been purchased, has been renovated or extended, or has been held for some time without a schedule ever having been prepared.

What you receive

• A schedule setting out eligible items by category.
• The deduction profile across future years.
• The basis of assessment and the method applied.
• Supporting documentation of how figures were arrived at.
• Assumptions, inclusions and exclusions, clearly stated.

What the 2026 Federal Budget changes mean

The 2026 Federal Budget did not change how depreciation itself is calculated. Division 43 capital works and Division 40 plant and equipment continue to work as they did. What changed is the treatment of rental losses and capital gains, and that makes a properly prepared schedule more valuable rather than less.

Negative gearing, from 1 July 2027

For established residential properties purchased after 7:30pm AEST on 12 May 2026, rental losses can no longer be deducted against other income such as salary. Those losses are instead carried forward and applied against future residential rental income or gains on residential property. New builds keep the existing treatment, and properties owned before 12 May 2026 are grandfathered.

Capital gains tax, from 1 July 2027

The 50 per cent CGT discount is replaced with cost base indexation for individuals, trusts and partnerships, alongside a 30 per cent minimum tax rate on real capital gains.

Why the schedule still matters

Depreciation continues to reduce taxable rental income across the whole period you hold the property. Where losses are carried forward rather than offset immediately, the deductions are not lost, and having them accurately identified and substantiated from the outset is what allows them to be applied later.

Because capital works deductions also affect the cost base of the property, the same schedule feeds directly into the capital gains position when you eventually sell. Under an indexation regime that calculation needs to be right.

The practical answer still depends on the property. If a schedule is unlikely to be worthwhile, we will say so before you commission one.

This is general information, not tax advice. Your accountant or adviser should confirm how these rules apply to your circumstances.

Who prepares the schedule

Asset Scope's schedules are prepared by a Certified Quantity Surveyor (CQS) and Member of the Australian Institute of Quantity Surveyors (MAIQS). See our accreditations →

Asset Scope is also registered with the Tax Practitioners Board (TPB). That registration is required to prepare tax depreciation schedules in Australia, and it is worth confirming for any firm you engage.

Australia and New Zealand

Depreciation treatment is not the same in both markets. Eligibility, categories and method differ between Australian and New Zealand rules, and the requirements change over time. We confirm the applicable basis for the property and its jurisdiction before preparing the schedule, and state that basis in the report.

Working with your accountant

Asset Scope prepares the schedule; we do not provide tax advice and we do not lodge returns. The schedule is written to be handed to your accountant or adviser, who applies it to your circumstances and determines what can be claimed.

How the work runs

Scope is confirmed first, then the property and available documentation are reviewed and assessed, with assumptions checked before issue. The full sequence is set out in how we work.