Tax Depreciation is a legitimate tax deduction available to owners of income producing properties to cover the costs of wear and tear on that property. Introduced as an incentive to encourage people to save for their retirement, it acknowledges that certain items (Besides the "bricks and mortar" of a property) such as carpets, whitegoods, curtains, etc. depreciate in value over time due to daily wear and tear. As a result, owners of income producing properties are entitled to claim a tax deduction to help fund the eventual replacement of these items. The "bricks and mortar" component of the property, if applicable, depreciate at a slower rate than these items mentioned above and are also claimable.
To be able to claim this deduction a property investor must engage a “suitably qualified professional" such as a Quantity Surveyor to prepare a Tax Depreciation and Capital Allowances Schedule on their behalf.
It is important to note that the Australian Taxation Office (ATO) recognises that Quantity Surveyors are suitably qualified professionals.
It is also important to note that accountants, solicitors, real estate agents and property valuers ARE NOT recognised by the ATO as being suitably qualified to prepare such schedules.