May 2, 2025
Introduction: Understanding Tax Claim Depreciation for Commercial Landlord
As a commercial landlord, understanding and maximising your Tax Depreciation entitlements can lead to significant tax savings — yet many property owners miss out on valuable deductions simply because they are unaware of what they can claim.
Here’s a comprehensive guide to ensure you are making the most of your Tax Depreciation opportunities:
- Tax Depreciation Starts with Your Purchase Price – Not the Previous Owner’s Report
When acquiring a commercial property, many landlords mistakenly rely on the vendor’s existing Tax Depreciation schedule. However, your purchase price forms the new cost base for Tax Depreciation purposes. If you paid a significantly higher price than the previous owner, you must commission a new, updated Tax Depreciation report that reflects your actual purchase price. This adjustment ensures you maximise your claimable deductions right from the start. - Updating Your Tax Depreciation Schedule for Annual Capital Expenditure
Commercial property owners frequently incur capital expenditure such as upgrading air-conditioning, lighting systems, or security equipment. These improvements should be captured in an updated Tax Depreciation schedule every year. Regular updates ensure you benefit from every new tax deduction to which you are entitled while maintaining your property’s condition and value. - Don’t Miss Tax Depreciation on Landlord Incentives
Landlord incentives — such as rent-free periods, cash payments, or contributions towards tenant fit-outs — are powerful tools to attract tenants. However, many landlords are unaware that these incentives can be eligible for Tax Depreciation or immediate deductions. Properly structuring these incentives ensures that, while supporting incoming tenants, you are also enhancing your Tax Depreciation claims.
Eligibility for Tax Depreciation as a Tenant
- Write Off Tenant Fit-Outs When They Exit
When tenants vacate and the premises are returned to base building condition, any remaining undepreciated fit-out assets can often be written off entirely. This is a critical but often overlooked Tax Depreciation opportunity. Studies show that up to 95% of landlords fail to claim these scrapping deductions, mainly because few tax quantity surveyors specialise in this niche area of Tax Depreciation. - Managing Tax Depreciation in Joint Ownership Structures
For properties held under joint ownership, each owner must claim Tax Depreciation and associated property expenses according to their percentage share. For example, if you own 50% of the property, you are entitled to 50% of the Tax Depreciation deductions. It is essential that your Tax Depreciation report clearly reflects each owner’s interest to ensure accurate and compliant tax reporting. - Instant Asset Write-Off and Tax Depreciation Benefits for FY2025
In the 2025 financial year, eligible landlords can benefit from the Instant Asset Write-Off for assets costing less than $20,000 (excluding GST if registered). Qualifying assets — such as air-conditioning units, CCTV systems, and other minor upgrades — can be immediately deducted rather than depreciated over several years. This measure complements your overall Tax Depreciation strategy by delivering immediate cash flow benefits and reducing your taxable income faster.
At TDQS, we specialise in unlocking every available Tax Depreciation benefit for commercial property owners. Whether you own property individually, jointly, or through more complex structures, our expert team ensures that you maximise your deductions and stay fully compliant.
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