A quantity surveyor needs enough information to establish four things: who owns the property and from when; what was built and when construction started and finished, what it cost to build, and what has been added or replaced since. The documents needed for a tax depreciation schedule are the ones that evidence those four points.
Most investors do not hold all of them, and that is normal. Where records are missing, the ATO accepts a construction cost estimate from an appropriately qualified person, which is why quantity surveyors prepare these reports at all.
What Documents Are Needed for a Tax Depreciation Schedule?
The ATO sets out what an owner must have to work out a capital works deduction: the type of construction, the date construction started, the date it was completed, the construction cost rather than the purchase price, details of who carried out the work, and the period during the year the property produced income.
Every document a quantity surveyor asks for traces back to one of those six points. Supply what you have, and the surveyor establishes the rest.
Core Property Documents
These establish ownership and the point from which deductions can run.
- The contract of sale, which carries the property address, the purchase price, and the contract date
- The settlement statement, which fixes the date the property came into your hands
- Ownership details, including the proportions held where a property has more than one owner
- The date the property first became available for rent and any periods it was not
Ownership proportions matter more than investors often expect. Where a property is held jointly, each owner claims their share, and the surveyor needs the split to apportion the schedule correctly.
The purchase price is worth a note of its own. It tells the surveyor what you paid, but the ATO is explicit that the purchase price of the building and land cannot be used as the construction cost. Neither can an insured cost nor a replacement cost.
Construction and Building Documents
- Building plans and specifications, including any architectural or engineering drawings you received at purchase
- The date construction started and the date it was completed
- The builder or developer who carried out the work
- The type of construction, since the rate and period of deduction depend on it
- Any schedule of inclusions or finishes supplied by the developer on a new purchase
If you bought from a vendor who had been renting the property out, ask whether they issued a capital works notice. A vendor who disposes of capital works begun after 26 February 1992 and who was able to claim deductions on them should give the buyer a notice containing the information needed to work out their own capital works deduction within six months following the income year of disposal. Where a vendor did not use the property to produce rental income, no notice is required, and the buyer obtains an estimate instead.
Renovation and Improvement Documents
Work carried out after original construction is claimed separately, so it needs its own evidence.
- Invoices and receipts for the work, which are the strongest form of evidence
- The dates each stage of work was carried out
- The scope of works, or a description of what was done
- Records of major upgrades such as kitchens, bathrooms, roofing, or structural changes
- Development approvals or council certificates, which help establish dates
Renovations completed by a previous owner still count. You need the dates and the scope even when the invoices belong to someone else, and a quantity surveyor can estimate the cost when the paperwork does not exist.
One exception applies if you did the work yourself. For an owner-builder, the value of your own labor and expertise and any notional profit margin does not form part of construction expenditure.
What If You Do Not Have the Original Documents?
This is the ordinary case rather than the difficult one.
Where actual construction costs cannot be determined, the ATO accepts an estimate from a quantity surveyor or other independent qualified person. Taxation Ruling TR 97/25 sets out the ATO’s position on who is qualified to make that estimate, and its guidance lists a quantity surveyor, a clerk of works, a supervising architect who approved payments at project stages, or a builder experienced in estimating similar projects.
The surveyor works from what does exist. Property records, plans, council information, the physical building itself, and construction cost data for the relevant period and location. The fee you pay for that estimate is itself deductible in the income year you pay it.
What Does the QS Assess On-Site?
An inspection lets the surveyor identify and measure what is actually there rather than what the paperwork suggests.
Two categories are being separated. Capital works under Division 43 cover the structure and items fixed to it. Plant and equipment under Division 40 covers assets that decline in value separately, and a quantity surveyor’s report can include a schedule of those depreciable assets alongside the capital works figures.
The inspection also records common property in strata schemes, external improvements, and the condition and age of individual assets, all of which affect how each item is treated.
Second-hand plant and equipment carry their own rules for residential rental properties, keyed to whether the property was acquired before or after 7:30pm AEST on 9 May 2017 and whether the assets were new. Your accountant is the right person to confirm how those rules apply to your circumstances.
How Does the Information Become a Depreciation Schedule?
The surveyor establishes construction dates and the applicable rate, estimates construction expenditure where actual costs are unavailable, identifies and values plant and equipment, and applies the period of ownership to produce a year-by-year figure.
Capital works deductions generally run for 40 years from completion of construction at 2.5%, with a 4% rate over 25 years applying to certain types of construction and dates. Our overview of what a tax depreciation schedule includes sets out how that output is presented.
Checklist: Documents to Have Ready
Use this as your working list of documents needed for tax depreciation schedule preparation.
| Category | What to provide |
|---|---|
| Ownership | Contract of sale, settlement statement, ownership proportions |
| Property | Full address, property type, date first available for rent |
| Construction | Plans, specifications, construction start and completion dates, builder or developer details |
| Costs | Building contract, progress claims, receipts, or a vendor’s capital works notice |
| Renovations | Invoices, dates, scope of works, and council approvals |
| Access | Contact details for the tenant or managing agent for inspection |
Send what you have. Gaps are expected, and none of them stop a schedule from being prepared.
FAQs
Do I need the original building contract?
It helps, and it is the most direct evidence of construction cost. Without it, a quantity surveyor estimates the cost, which is the basis the ATO accepts where actual costs cannot be determined.
Can I use the purchase price as the construction cost?
No. The ATO states that the purchase price of the building and land cannot be used as the construction cost, and neither can the insured cost or the replacement cost.
What if the previous owner renovated the property?
Those works can still be included. Provide whatever dates and descriptions you have, and the surveyor estimates the cost of work you did not pay for yourself.
Is an inspection always required?
The inspection is what allows plants and equipment to be identified and assessed on site. Discuss your property with the surveyor, since what is needed depends on the property and the records available.
Is the cost of the report deductible?
Yes. The ATO treats the fee paid to an appropriately qualified person for a construction cost estimate as deductible in the income year you pay it.
When should I order the schedule?
The ATO notes these reports can take time to prepare and suggests obtaining one as early as possible. Where a return has already been lodged, amendment time limits apply.
Getting Your Schedule Started
Gather the contract, the settlement statement, and anything you hold on construction and renovations. That is usually enough to begin, and a quantity surveyor establishes the remainder.
Archi-QS prepares tax depreciation schedules for residential, commercial, and industrial properties. Tell us about your property, and we will confirm what we need from you.
This article is general information. Your accountant is the right person to advise on how depreciation applies to your circumstances and which method suits your position.