Guide

Tax Depreciation Schedules for Sydney Investors (2026)

7 min readUpdated 19 May 2026

A tax depreciation schedule is a one-off report from a qualified quantity surveyor that lists every depreciable asset in your investment property — capital works (the building itself) and plant and equipment (the fittings) — and assigns a dollar value to the deductions you can claim each year. Done well, it routinely returns four-to-six figures in tax deductions across the first five years of ownership. Done badly, or skipped entirely, you forfeit deductions you were entitled to. This guide explains what a depreciation schedule is, what changed in 2017 (a meaningful tightening for second-hand stock), what it costs, and when it pays for itself.

The short answer

If you bought a brand-new or near-new Sydney investment property after 9 May 2017, a tax depreciation schedule almost always pays for itself in year one. If you bought an established (second-hand) property, the rules tightened — you can still claim capital works depreciation on the building, but you cannot claim depreciation on the existing plant and equipment unless you bought it directly from a developer as new. Schedules cost $500 to $900 and the fee is itself tax deductible.

Two categories of depreciation

The Australian Taxation Office splits property depreciation into two streams. Both can apply to the same property; both go on the same schedule; both are claimed each year on your tax return through your accountant.

Capital works (Division 43): the structural building itself — walls, roof, floors, fixed cabinetry, driveways, swimming pool shell. Claimable at 2.5% per year for 40 years on residential properties built (or substantially renovated) after 15 September 1987. Tighter for earlier construction.
Plant and equipment (Division 40): removable assets — carpets, blinds, dishwashers, ovens, air conditioners, hot water systems, smoke alarms. Claimable across each asset's effective life as set by the ATO. Rates and methods vary by item.

What changed in May 2017 (and why it matters for second-hand purchases)

On 9 May 2017 the Federal Government changed the rules for plant and equipment depreciation on second-hand residential property. If you bought an established residence after that date, you cannot claim depreciation on the plant and equipment that was already in the property when you bought it — only on items you purchased and installed yourself. Capital works (Division 43) was not affected and remains claimable on any qualifying building regardless of purchase date. Two practical consequences: brand-new property still attracts both streams of depreciation; second-hand property typically only attracts the capital works stream plus depreciation on anything you replace.

What it costs

A residential tax depreciation schedule from a qualified quantity surveyor typically costs $500 to $900 in Sydney in 2026, depending on the property type, location and whether a site inspection is required. Inner-city apartments and detached houses sit at the lower end; large or unusual properties sit at the higher end. The fee is itself tax deductible in the year it is paid. Schedules are valid for the life of the property under the same ownership — no annual fee, and your accountant uses the same schedule each year until you sell or substantially renovate.

When a schedule pays for itself

For most Sydney investment properties the schedule recovers its cost in the first year. A few rough benchmarks based on common Sydney stock — your accountant will give you a precise number once they have the schedule.

Brand-new two-bedroom apartment in Parramatta, Hurstville or Wolli Creek: typical first-year deduction range $8,000 to $14,000. Pays for the schedule many times over in year one.
Brand-new three-bedroom house and land in Box Hill, Marsden Park or Oran Park: typical first-year deduction range $12,000 to $20,000.
Established three-bedroom house bought after 2017 in Penrith, Blacktown or Liverpool: capital works only, typically $2,500 to $5,000 per year for the remainder of the 40-year period. The schedule still pays for itself but the headline deductions are smaller.
Heritage-listed pre-1987 home: limited or no capital works claim on the original structure but significant claim on any post-1987 renovation. Get the quantity surveyor to walk you through what is and is not claimable before commissioning.

Who can prepare a schedule

Only a qualified quantity surveyor can prepare a tax depreciation schedule that the ATO will accept. Most accountants, real estate agents and property managers cannot — and any schedule they produce will not satisfy the ATO's evidentiary requirements. The major national firms (BMT, Washington Brown, Duo Tax, MCG) operate across Sydney; a number of independent local quantity surveyors do too. Look for membership of the Australian Institute of Quantity Surveyors (AIQS) and a written guarantee that the schedule will produce deductions at least double the fee in the first year, or the fee is refunded.

When to commission a schedule

The right time is after settlement and before the end of the financial year in which you settled. If you settled in March, get the schedule before 30 June so you can claim a full first-year deduction even if it is only for a few months. If you have already missed prior years, you can usually amend up to two prior tax returns — speak to your accountant. If you renovate the property substantially after purchase (new kitchen, new bathroom, structural work), get a top-up schedule from the same quantity surveyor at completion to capture the additional deductions.

Common mistakes to avoid

A few patterns that recur and cost investors deductions. None of these are deal-breakers; all are avoidable with the right schedule and accountant.

Skipping the schedule on a 'too small to bother' purchase — even modest established stock typically produces $1,500 to $3,000 per year in capital works deductions, worth $500 to $1,000 in tax saved annually at typical marginal rates.
Using a generic template from an online provider instead of a qualified quantity surveyor — the ATO can disallow the deductions if the schedule does not meet the evidentiary standard.
Claiming plant and equipment depreciation on second-hand items bought after 9 May 2017 — the rule change is now well-established and the ATO does check.
Treating renovation costs as repairs (immediately deductible) when they are improvements (capital, claimable through depreciation). Your accountant and quantity surveyor should agree on the classification of every line item.
Forgetting to update the schedule after a substantial renovation — the new fittings have their own depreciation profile that needs to be added.

How this fits with your other property professionals

A tax depreciation schedule is one of three reports that work together on a Sydney investment property. Your accountant relies on the schedule for the annual deduction calculation. Your property manager keeps records of plant-and-equipment replacements during the tenancy that may need to be added to the schedule. Your conveyancer locks in the purchase price and settlement date that anchors the schedule's start point. A quantity surveyor experienced with Sydney investment stock will usually liaise directly with your accountant — ask up front whether that's included in the fee or billable separately.

FAQ

Frequently asked questions

How much does a tax depreciation schedule cost in Sydney?

Most residential schedules sit in the $500 to $900 range in 2026, depending on the property type and whether a site inspection is needed. The fee is itself tax deductible in the year it is paid. Reputable firms guarantee that first-year deductions will exceed the fee — typically by a wide margin for newer stock.

Can I claim depreciation on a second-hand Sydney apartment?

You can claim capital works depreciation (the building itself, at 2.5% per year for 40 years from construction) on any qualifying residential property regardless of when you bought it. You cannot claim plant and equipment depreciation on items already in the property if you bought after 9 May 2017 — only on items you purchase and install yourself. The capital works stream alone is often worth getting a schedule for.

Do I need a new schedule if I renovate the property?

Yes — get a top-up schedule from the same quantity surveyor after substantial renovation. New kitchens, new bathrooms, structural changes and significant capital improvements all attract their own depreciation profile that needs to be added. The top-up is usually charged at a discount to the original schedule.

Can my accountant prepare the schedule instead?

No — only a qualified quantity surveyor (typically a member of AIQS) can prepare a schedule that meets the ATO's evidentiary requirements. Your accountant uses the schedule each year to calculate the deduction on your tax return, but they cannot prepare the schedule itself.

How long is a tax depreciation schedule valid?

For the life of the property under the same ownership. There is no annual fee — your accountant uses the same schedule each year until you sell, substantially renovate, or change ownership structure. A top-up schedule covers any major renovation; a new schedule is typically commissioned by the next owner after sale.