Doing the maths

I know i get my tax rate back on total costs, i pay at my tax rate on income – no it is the net loss not the total costs.
Depreciation is an expense incurred.
So net property income / loss = Total income – Total Costs – depreciation
I am assuming total costs do not include this depreciation amount.
So Net Property Loss = 12220 – 11223 – 2762
So 12220 – 11223 – 2762
= minus 1765
Now you pay tax on your wage as you earn it
So you have to look at the maximum marginal rate
http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm
if you earn over 34001 tax is 30%
say you earned  35766 then you would have paid 30% tax on $1765 earned during the year over $34001
your tax return subtracts the net property loss from your assessable income bringing it down to 34001.
That works out to approximately a $529 tax return
(as you already paid this tax when you were earning this from a wage each week)

If your house was recently built and you do not mind increasing capital gains through reducing your cost base you can claim 2.5% of the building costs for the property. if it cost you $100,000 to build the house that is $2500 in depreciation a year for 40 years. if you are not already claim this as an expense