Two separate deductions sit behind the word depreciation, and this works out both from figures on your schedule.
No asset effective-life table is built in. Effective lives run to hundreds of asset classes and are revised, so the life comes from your schedule or the Commissioner’s determination.
Works out the capital works and plant and equipment deductions on an investment property from the cost, rate, effective life and method you supply, apportioned by days held.
Original construction cost
What the structure cost to build, excluding land — not what you paid for the property. Where the figure is unknown, a quantity surveyor establishes it, and that is the document the ATO expects to see.
Capital works rate
The annual rate on the structure. Which rate applies depends on when construction began, so it is entered rather than assumed from a date the calculator was never given.
Effective life
How long the asset is expected to last, in years. It drives the rate under both methods, and getting it from a schedule rather than guessing is the difference between a claim and a problem.
Method
Prime cost writes an asset off evenly across its life. Diminishing value writes more off early and less later, applying the rate to what is left rather than to the original cost.
Days available this year
Deductions are apportioned by days the property was rented or genuinely available. A property bought in February does not get a full year of deductions.
The total is the deduction for the year, and it is the figure that goes into the cashflow calculation as depreciation claimed. It reduces taxable income without costing cash.
The two components behave completely differently over time. Capital works is flat for as long as the write-off period runs; plant under diminishing value falls every year as the remaining value shrinks.
Years of capital works remaining tells you how long the larger of the two deductions has left. Buying a property whose write-off period has nearly expired is buying a smaller deduction than the headline suggests.
Every figure below is computed by the same calculator on this page, from the inputs described. Nothing here is typed in by hand, so an example cannot disagree with the tool.
Capital works dominates the total, which is typical: the structure is worth far more than the appliances in it. That is also why the construction cost is the figure most worth establishing properly.
A smaller first-year deduction, and one that will not shrink. Whether the earlier deduction is worth more depends on your income now against your income later.
Apportionment is by days, not by months or by goodwill. A property available for part of a year gets that part of the deduction, and forgetting to apportion is a common amendment.
Prime cost applies a flat rate to the original value each year, so the deduction is the same every year until the asset is written off.
Diminishing value applies a multiple of that rate to the value remaining, so the deduction is larger early and smaller later. Over the full life both write off the same total; they differ only in when.
Capital works is separate from both and is a flat rate on the original construction cost, running for as long as the write-off period lasts.
Your figures are eligible
Nothing here tests whether an asset can be depreciated. Second-hand plant in a residential property acquired after certain dates generally cannot be, and that restriction alone removes many claims.
One asset at a time for plant
Plant is entered as a single value and life. A real schedule lists dozens of assets with different lives, and running them as one will not match it.
No pooling or immediate write-off
Low-value pooling and immediate write-off provisions change the timing substantially for small assets. Neither is modelled.
A schedule is the real document
A quantity surveyor’s depreciation schedule itemises every asset with its own life and value. This calculator works on figures from one; it does not replace it.
No effective-life table
A built-in table would give confident answers for the assets it contained and silently wrong ones for everything else. Asking for the life is the honest alternative.
Disposal is not modelled
Selling or scrapping an asset triggers a balancing adjustment that can be a deduction or assessable income. Neither appears here.
Works out what an investment property costs or returns each year: rent after vacancy, every holding cost, the loan, and the tax effect computed from the statutory scale.
Works out gross and net rental yield on an investment property, allowing for vacancy and operating costs.
Works out the capital gain on an asset from its cost base, applies losses and any discount you are entitled to, and computes the tax as the difference the gain makes to your assessment on the statutory scale.
This calculator can be embedded on a business website, branded to match it, with a call to action that sends the enquiry to that business rather than collecting anything here.