Depreciation allows rental property owners to claim a portion of the building’s construction costs and the cost of assets within it as a tax deduction each financial year. It’s not a reduction in the property’s sale price, but rather a tax benefit realised over the ownership period.
As of December 2025, claiming depreciation on a Melbourne rental property involves engaging a quantity surveyor to prepare a depreciation schedule. This schedule details the depreciable assets within the property – from the building itself to items like carpets, blinds, and appliances. Currently in Melbourne, a typical depreciation schedule costs between $700 and $1,500. When preparing to sell, understanding your potential depreciation claim is important, as it impacts your capital gains tax (CGT) calculations. Sellers often find that maximising depreciation claims over their ownership period can offset some of the CGT liability. In 2026, we’re seeing more buyers in the Eastern Suburbs, particularly around Balwyn and Doncaster, factoring potential depreciation benefits into their investment decisions. Fletchers’ experience shows that well-maintained properties with clear depreciation schedules tend to attract stronger buyer interest. The timing of claiming depreciation can also influence your tax position in the year of sale, so it’s a factor to discuss with your accountant.
Depreciation is a valuable tax benefit for Melbourne rental property owners, and understanding its implications is crucial when considering a sale.