Expert Bust #7 – Avoid High Depreciation Props

There’s no such thing as depreciation “benefits”. Depreciation is the opposite of appreciation. Properties with the highest rates of depreciation are fighting against capital growth.

If you can claim $10k in depreciation for a financial year and you’re paying 40c in the dollar in tax, then you’d pay $4k less tax. Nothing wrong with doing that, claim every cent you can. But don’t go chasing these types of properties because you’re not better off by $4k, you’re net position has actually deteriorated by $6k. You’re worse off by $6k compared to owning a property that didn’t depreciate at all.

More detail is available from the full article, “Avoid Properties with high depreciation” in the Expert Busting series on the Select Residential Property website.

• This topic was modified 3 years, 10 months ago by  Benny. Reason: remove link