April 17, 2025
Owning a commercial property in Australia is one of the most reliable ways to build long-term wealth. But are you truly getting the most from your investment?
If you haven’t explored the benefits of a Commercial Property Depreciation Report, you could be missing out on thousands of dollars in tax deductions each year. This guide walks you through everything you need to know about commercial depreciation—what it is, how it works, and why it’s a must-have tool for every Australian commercial property owner.
What Is a Commercial Property Depreciation Report?
A Commercial Property Depreciation Report, also known as a Tax Depreciation Schedule, details how much a commercial property and its assets decrease in value over time. The Australian Tax Office (ATO) allows owners and tenants to claim this loss in value as a tax deduction, significantly reducing taxable income.
There are two main categories of commercial property depreciation:
- Capital Works Deductions (Division 43)
Covers the structural elements of a building—such as walls, floors, roofs, concrete slabs, and brickwork. Generally claimable over a 40-year period.
- Plant and Equipment Deductions (Division 40)
Includes mechanical or removable assets like air conditioning systems, lighting, commercial kitchen appliances, lifts, office furniture, security systems, and more.
Why It Matters for Commercial Property Investors in Australia
Commercial properties across Australia—from office buildings and warehouses to restaurants, clinics, and retail shops—are packed with valuable assets that can be depreciated. A professionally prepared depreciation report allows you to:
- 💰 Increase cash flow by claiming larger deductions
- 📉 Lower taxable income, resulting in a reduced tax bill
- 📊 Boost ROI and overall profitability of your investment
- 🛠️ Claim fit-out costs, especially for tenants and owner-occupiers who’ve invested in internal upgrades
Whether you’re an investor leasing your property or a business owner operating from it, depreciation is one of the most effective ways to maximise returns.
Eligibility for Scrapping Deductions
Who Should Get a Commercial Property Depreciation Report?
✅ Commercial property owners who lease space to tenants
✅ Owner-occupiers using the property for their business operations
✅ Long-term tenants who have installed significant fit-outs or improvements
Even older buildings can qualify. If you’ve made upgrades or improvements, or simply haven’t had a depreciation report done before, you could be entitled to substantial backdated deductions (subject to ATO time limits).
When Should You Order a Report?
- Immediately after purchasing a commercial property
- After renovating or adding new assets to the property
- Before the end of the financial year to ensure maximum deductions are claimed
- Even years after purchase—it's not too late to get started
Once prepared, the report is a one-time cost that remains valid for the life of the building or until major changes are made.
Who Can Prepare a Depreciation Report?
Only a qualified Quantity Surveyor—registered with the Australian Tax Office—is authorised to estimate construction costs and asset values for depreciation purposes.
Your surveyor will:
- Visit the site for an inspection (if needed)
- Identify all eligible depreciable assets
- Prepare an ATO-compliant schedule
- Include breakdowns for both owners and tenants (if applicable)
Make sure you choose a firm with specialist experience in commercial property and deep knowledge of Australian tax regulations.
What’s Included in the Report?
A detailed commercial depreciation schedule includes:
- Year-by-year depreciation projections (up to 40 years)
- Division 40 and Division 43 itemisation
- Low-value pooling and immediate asset write-offs
- Separate schedules for building owners and tenants (where applicable)
- Retrospective calculations for prior financial years (if eligible)
Industries That Benefit Most
📦 Warehousing & Industrial
🏥 Medical, Dental & Allied Health
☕ Retail & Hospitality
🏢 Corporate Offices
🎓 Education & Childcare Facilities
🧰 Manufacturing & Trade Workshops
Whether you're leasing out a logistics hub in Brisbane or running a café in Melbourne, depreciation deductions can make a major difference to your bottom line.
Key Takeaways
- A Commercial Property Depreciation Report is a powerful tax tool for both investors and business owners.
- It can result in significant annual savings, even on older properties.
- Deductions apply to both building structure and internal assets or improvements.
- Reports must be prepared by a registered Quantity Surveyor to be ATO-compliant.
- It’s a one-time investment with long-term benefits.
Take the Next Step – Contact TDQS Today
Don’t leave money on the table. If you own or lease a commercial property anywhere in Australia, now is the time to unlock your full tax depreciation entitlements.
📞 Contact TDQS – Tax Depreciation & Quantity Surveyors
📱 Call 02 5502 5500
📧 Email info@tdqs.com.au
💼 Get a free quote and discover how much you could be saving.
