Tax depreciation in a rental property or tax depreciation in general is a depreciation that can be considered as an expense on a tax return based on the tax laws that would result to a deduction for the owner’s tax. The bigger the depreciation cost is on a property, the lesser the tax liability will be and the lesser the payable tax would be. It is the measured expense of a fixed asset’s cost over its useful life.  Tax depreciation for rental property is a revenue tax deduction that lets the property owner to recuperate the specific costs on a property. It covers the cost of being obsolete, tear, wear, and deterioration of a property.

Tax Depreciation Rental Property

Depreciation can only be claimed for tax purposes by rental properties. Also, it is only applicable for the physical property and not the land.  

It is also important to know how tax depreciation is calculated. There are different ways to calculate depreciation for residential and non-residential rental properties. There are also two types of depreciation, a straight line method and a declining balance method.  In order to maximise tax deductions, it is advisable to organise a tax depreciation schedule so that you can claim all possible deductions from your taxes.

Property Tax Depreciation

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