What’s in a Tax Depreciation Report? A Section-by-Section Look at Our Sample

Cover and property informationPages 1 and 2

The cover names the property and the owner and shows the report reference and first claim year. Page 2 sets out the details the figures are built on: the owner type, whether the property is residential or commercial, how the property was acquired, the purchase price and the land value, the contract and settlement dates, when the property started producing income, the preferred method and whether the low value pool is switched on. If the property is not wholly income-producing, deductions are apportioned to the income-producing share, and the page says so.

Section 1: Executive summaryPages 4 and 5

This is the headline page. It shows the deductions for plant and equipment and for capital works, the first-year deduction under each method, and the totals for the first 5 years, the first 10 years and the forecast life of the schedule, with any final-year assumptions and non-deductible adjustments labelled. A second page reconciles the purchase price: how much is land, how much is plant, how much is capital works at acquisition, and how much does not qualify.

The summary notes that these are deductions, not cash refunds, and that Division 43 amounts you claim reduce the CGT cost base when you sell, while Division 40 plant is treated separately.

Section 2: Accountant quick referencePage 6

A single page for your accountant or registered tax agent: the first-year deduction under the diminishing value method, the first five years, the annual capital works figure, the lodgement details and the preferred method. It is designed to be forwarded as it is.

Section 3: Your property tax positionPage 7

A snapshot of where the 1 July 2027 changes may matter for the property in the report. It looks at the recorded acquisition date, the property use and the owner type, and flags, for example, whether the property was held at 7:30pm (ACT time) on 12 May 2026 and whether the owner type needs a separate review. The commercial sample notes that the negative gearing limit is directed at residential property. The page also lists the records to keep, and when to update the schedule.

It is not a calculation of future tax. For what is law and what is still a bill, read our law as at 13 November 2026 article and the Senate committee report article.

Sections 4 and 5: How entitlements were determined, and methodologyPages 8 and 9

These two pages explain the basis of the numbers. Section 4 lists the rates, methods and concessions applied: the capital works rate, whether the second-hand plant restriction was applied, how low-cost items were treated and the effective lives used. The restriction does not apply to commercial property, or to some owners such as companies. In the residential sample the restriction is not applied, because the recorded owner is a company. In the commercial sample it is not applied, because the property is commercial and the recorded owner is a company.

Section 5 sets out the method. A quantity surveyor estimates the construction cost where the actual cost is not available, and the effective lives come from the Commissioner’s determination in force when the asset was contracted for, acquired or started to be constructed. The page also states the two formulas. Diminishing value is 200% divided by the effective life, multiplied by days held over 365, applied to the asset’s cost in the first year and to its opening adjustable value (plus any second-element amounts) after that. Prime cost is 100% divided by the effective life, multiplied by days held over 365, applied to the cost.

Sections 6 and 7: Year-by-year summariesPages 10 to 13

Two tables, one for each method. Each row is an income year and shows the plant and equipment deduction, the low value pool deduction, the capital works deduction, the total and the running total. This is where your accountant picks the figure for the year they are lodging. After each table is a page of labelled final-year assumptions. Depending on the figures, it can include assumed scrapping, a write-off of the remaining low value pool balance shown for presentation only, and a small rounding-to-cost figure. The pool write-off and the rounding figure are not tax deductions.

Diminishing value is larger in the early years. Prime cost is the same each year. Under diminishing value the asset’s value never reaches zero by itself, so the rest is claimed when the asset is sold or scrapped (a balancing adjustment).

Sections 8 and 9: Plant and equipment by assetPages 14 to 20

Each asset is listed with its cost, its effective life and its deduction in each of the first ten years, under the diminishing value method (section 8) and the prime cost method (section 9). The diminishing value page also shows the year an asset’s written-down value falls below $1,000, when it can be moved into the low value pool, with a reconciliation of the transfers.

Section 10: Capital works schedulePage 21

The building itself. The schedule shows each stage of construction with its completion date, the construction cost, the written-down value at acquisition, the rate and the annual deduction. Capital works are based on what it cost to construct the building, not what the property is worth, and the cost excludes land and general landscaping. Where the original invoices are not available, the quantity surveyor estimates the cost.

Section 11: ChartsPages 22 and 23

Charts that show how the cost splits between plant and building, how yearly deductions compare under the two methods over the first 15 years, and how plant and equipment deductions build up over the first 20 years.

Section 12: Low-cost items, low value pool and lifecycleResidential sample page 24; commercial sample pages 24 and 25

Small items are treated differently. An item costing $300 or less is deducted in full in the first year if you use it mainly to produce income that is not business income, it is not part of a set that costs more than $300, and the total cost of identical or substantially identical items is $300 or less. Other items under $1,000 can be allocated to the low value pool if the taxpayer chooses to use one. The pool is written down at 18.75% of the cost added in the first year and 37.5% of the pool balance after that. The page lists the pooled items and the pool’s deduction for the first year. In the commercial sample this section shows the low value pool. No asset in that sample costs $300 or less, so the $300 deduction does not apply. Our article what is low-value pooling? explains the pool.

Sections 13 to 15: Explainers and glossaryResidential sample pages 25 to 27; commercial sample pages 26 to 28

Plain-English pages on Division 40 and Division 43, how each is claimed, typical assets for the property type, and a glossary of the terms used. They are written for an investor reading the report for the first time.

Appendices A1 to A6Residential sample pages 28 to 31; commercial sample pages 29 to 32

• A1, what your deductions are worth

  A deduction is not a cash amount. This appendix converts the deductions into indicative cash values at a stated illustrative rate. It is indicative only, and the real value depends on your marginal tax rate, ownership share and owner type. It is not a promise of any saving.

• A2, Division 43 and your CGT cost base

  A short page on how capital works deductions can reduce the cost base, with a list of records to keep. It does not calculate a capital gain. Read more in how depreciation affects your CGT cost base.

• A3, diminishing value or prime cost

  A side-by-side of the two methods, noting that your tax agent elects the method for each asset.

• A4 to A6, planning guide

  A records checklist, when to update the schedule, key milestones and common questions.

Contact details, disclaimer and limitationsResidential sample pages 32 and 33; commercial sample pages 33 and 34

Who prepared the report and how to reach us, followed by the basis and limits of the figures. They are estimates, they reflect the asset register at the issue date, and a change such as a renovation means the schedule needs updating.