The common investor purchasing a 1950’s post war cottage would assume that there is little value in obtaining a depreciation report for that property. As described below, this leads to investors missing millions of legitimate tax deductions each year.

              post war 1950s home            post war 1950s home - interior

Lin and Andrew purchase a post war 1950s home in 2011 for $460,000. Although it does not qualify for deductions for the construction cost of the building (being a pre-1985 house), they can claim the depreciation for the plant and equipment included in the purchase such as the blinds, carpets and stovetops. While Lin and Andrew might think that the plant and equipment in the property should be replaced as a write off, they are missing out on over $10,000 worth of deductions in the first 4 years.

The table below shows example values of plant and equipment in a 1950’s post war home including the mistaken value often attributed to the item by the investor and the real valuation undertaken by Deppro:

Item Mistaken value Value for depreciation purposes
Carpet Write off $2,439
Hot Water System $50 $1,440
Heaters $100 $847
Window blinds $300 $3,727
Outdoor furniture $50 $581
Smoke Detectors $20 $186
Rangehood $50.00 $254
Cooktop $80.00 $423
Oven $100.00 $508
Total $10,405
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Dorian Traill is the current Director of Grand Capital Finance Group and Fountain Property Group. He specialize in home loans for people as well as helping them build wealth through quality investment properties that ultimately lead to long term financial freedom.