A depreciation schedule is not always a once-only document.
It may need to be updated when something material changes at the property.
Common reasons to update include:
- Kitchen renovation
- Bathroom renovation
- New flooring
- New air conditioning
- New appliances
- Extension or structural works
- Commercial fit-out upgrade
- Tenant fit-out changes
- Scrapping or demolition
- New common property works
- Change from private use to rental use
- Change from rental use to business use
- Purchase of additional assets
- Updated construction cost information
For residential investors, updates are particularly important after renovations or asset replacements.For commercial owners, updates may be needed more often because fit-outs, tenants and capital expenditure can change regularly.
An outdated schedule may cause missed deductions or incorrect claims. For example, if an investor installs a new air conditioner but never tells their accountant or updates their schedule, that asset may not be depreciated correctly.
Koste.ai can help property owners keep track of property changes and identify when a report update may be required.
Frequently Asked Questions
Does every renovation require a schedule update?
Not necessarily every minor repair, but significant renovations, new asset additions or removals generally require the schedule to be reviewed and updated.
Can I add new assets to an existing depreciation schedule?
Yes. New assets added after the original schedule was prepared can be added to an updated schedule, allowing your accountant to claim them correctly.
What if I sell the property without updating the schedule?
An outdated schedule can result in the accountant missing deductions or using incorrect figures for the CGT calculation. Updating before sale is recommended.
How often should commercial property owners review their depreciation?
Commercial property owners should review their depreciation whenever fit-outs change, tenants change, or significant capital expenditure occurs — which can be every few years.
Does installing solar panels require a schedule update?
Yes. Solar panels and associated equipment are depreciating assets. They should be added to the schedule when installed so the deductions can be claimed correctly.
Written by Koste Team · Koste Chartered Quantity Surveyors · AIQS Member · RICS Member · TPB Registered · 1300 669 400 · info@koste.ai