Tax Depreciation For A Commercial Office With Attached Warehouse Purchased For $4.2m

Case Study

Commercial Tax Depreciation

The details

  • The commercial property is an office with an attached warehouse, purchased recently for $4.2m
  • Comprising of a large workshop and storage floor area with raking and stock operating minor assembly lines and moveable industrial vehicles/forklift equipment
  • Total gross lettable area for the site is 2,875 sqm, split across two separate tenancy areas
  • Building features: storerooms, internal lab, staff room, meeting rooms, loading bays, 39-car parks

In this example we can see that the tax depreciation assessment undertaken had a massive impact on the tax amount claimable, with a claimable depreciation net amount sitting at $52,064 per annum. This depreciation is not a real cash flow, however, will be allocated to existing losses, or may be offset against taxable net income/profit depending on the case

No Tax Depreciation Claim Applied Tax Depreciation Claim $173,546 p/a Applied
Total Annual Income: ($25,548 p/m) $306,576 Total Annual Income: ($25,548 p/m) $306,576
Total Annual Expenses: ($126,530) Total Annual Expenses: (p/a) ($126,530)
Cash Income minus Expenses $180,046 Cash Income minus Expenses $180,046
Tax Depreciation Claimed:  $ –  Tax Depreciation Claimed:  ($173,546)
Pre-Tax Loss: $180,046 Pre-Tax Loss: $6,500
Tax Refund (@30%) ($54,014) Tax Refund (@30%) ($1,950)
Net Annual Cash Position: $126,032 Net Annual Cash Position: $178,096
Monthly After Tax Cash Position $10,503 Monthly After Tax Cash Position $14,841
The additional tax benefit per annum amounts to $52,064

Disclaimer: The tax depreciation amount within this case study relates to the first year claim and will vary depending on the method and asset allocations considered for tax depreciation. It will be different for each case and assessed on the business infrastructure, equipment/chattels and capital expenditure on the property recently

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Mackay
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Ernest van Zyl
Manager Property Advisory Services
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Toowoomba
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Toowoomba
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Valuer
Perth
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Valuer
Mandurah
Michael Sinclair
Valuer
Perth
Yury Bonne
Valuer
Perth
Dean Munns
Associate Director
Perth
James Sholdas
Associate Director Valuations
Perth
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Associate Director Valuations
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Associate Director
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Director Valuations
Perth
Ben Lamers
Director Acumentis Advisory
Perth
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Regional Director
South West WA
Scott Robinson
Regional Director
Mandurah
Richard Graham
State Director Rural & Agribusiness WA
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Blake Lieschke
State Director – Property and Advisory
Perth
Nathan King
National Director – Advisory, State Government & Projects, State Director – WA
Perth
Ernest van Zyl
Manager Property Advisory Services
James Morrell
Senior Valuer
Lismore
Angus Cooke
Valuer
Inverell
Tom McDouall
Regional Director
Newcastle
Heath Craft
Valuer
Albury
Maria Ergos
Client Services Team Leader
Sydney Residential
Gregory Jordan
Valuer
Port Macquarie
Jack Prosser
Valuer
Port Macquarie
Louise de Savery
Director
Newcastle
Harry Morrow
Valuer
Tamworth
Simon Mandile
Senior Valuer
Sydney
Emmanuel Ergos
Senior Valuer
Sydney
Justine Franklin
Valuer
Albury - Wodonga
Adam Scerri
State Director - Residential
Sydney
Amy Frankel
Regional Director
Port Macquarie
Lara Watts
Valuer
Bundaberg
Adrian Marks
Valuer
Brisbane
Justin De Pinto-Smith
Valuer
Mackay
Matt Wilson
Senior Valuer
Cairns
Sarah Banner
Director - Valuations | Residential
Brisbane
Clancy Miller
Valuer
Townsville
Paul Krause
Senior Valuer
Mackay
Jack Macdonald
Senior Valuer
Roma
Ernest van Zyl
Manager Property Advisory Services
Henry Brown
Director
Brisbane
Richard Holles
Senior Valuer
Toowoomba
Zac Beveridge
Valuer
Toowoomba
Wayne Airey
Associate Director
Sunshine Coast
Will Smallacombe
Senior Valuer
Cairns
Alexandra Doneley
Senior Valuer
Emerald
Geoff Duffield
State Director Residential QLD
Brisbane
Jany Pezard
Director - Valuations
Sunshine Coast
Gareth Turner
Director
Brisbane
Jim Lyons
Director Valuations
Brisbane
Lachlan Dunsdon
National Director Rural & Agribusiness
Brisbane
Mark Robins
State Director SA
Adelaide
Leon Sleiters
Valuer
Hobart
Harry Chapman
Valuer
Launceston
Harry Chapman
Valuer
Launceston
Tyrone Tweddle
Valuer
Hobart
Joe Stansfield
Regional Director - Tasmania (North)
Launceston
David Duffield
Regional Director - Tasmania (South)
Hobart
James Somlai
Associate Director
Melbourne
Nick Funnell
National Director - Asset Advisory
Melbourne
Rosheen Stephenson
Regional Director
Gippsland
Mark Pastor
Associate Director
Melbourne
Damien Stone
State Director Residential Victoria
Melbourne
Felicity Graham
Senior Valuer
Bunbury
Brandon Prince
Valuer
Perth
Curtis Borszeky
Valuer
Perth
Rachel Kendall
Valuer
Mandurah
Michael Sinclair
Valuer
Perth
Yury Bonne
Valuer
Perth
Dean Munns
Associate Director
Perth
James Sholdas
Associate Director Valuations
Perth
Tom O’Sullivan
Associate Director Valuations
Perth
Kate Bingham
Associate Director
Perth
Tony Gorman
Director Valuations
Perth
Ben Lamers
Director Acumentis Advisory
Perth
Aaron Hughes
Regional Director
South West WA
Scott Robinson
Regional Director
Mandurah
Richard Graham
State Director Rural & Agribusiness WA
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Blake Lieschke
State Director – Property and Advisory
Perth
Nathan King
National Director – Advisory, State Government & Projects, State Director – WA
Perth

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