In short, yes, it is a great idea! Read on to find out why.
Depreciation is an accounting term that describes wear and tear of an asset which occurs over the time that you own it. Typically, a building and all that it contains depreciates in value over time, while the land upon which the building sits, appreciates. The government allows investors to claim depreciation on some property assets and the building itself. The Australian Taxation Office has a schedule of effective lives of the various parts of the build, the building structure and the fixtures and fittings within the building.
Investors may claim things such as blinds, a dishwasher, carpets, buildings that are less than 40 years old, air conditioning units, stoves, hot water systems, kitchens, bathrooms, lights - basically anything that is within the unit and is rented with the unit - including furnishings - may be claimed.
I refer my investor clients to skilled and professional quantity surveyors who can attend the investment property and complete and prepare a tax depreciation schedule for your use. An experienced quantity surveyor has extensive knowledge of construction and the allowable deductions that accord with the ATO's requirements. In doing so, you are able to legally minimise your tax.