Claim your property depreciation deductions and save    ORDER NOW

NBtax Tax Bites

image description

Terrific Returns on Torquay Properties through Depreciation Allowances

Our tax depreciation case studies shine the spotlight on the gorgeous region of Torquay in Victoria. With more and more people, leaving capital cities and opting to work remotely, regional coastal townships such as Torquay are attracting investors. Located roughly 95kms from Melbourne and 21kms south of Geelong, Torquay provides great opportunities with plenty of infrastructure and growth. 

Synonymous with surf, Torquay is ideal for families, professional couples, and sea changers seeking a fresh, casual vibe to work and play. Famous for its surf beaches and surf industry, visitors can explore the Great Ocean Road and visit the many charming shops and eateries, plus soak up the local history.

Depreciation Benefits based on Depreciation Schedules for Investment Properties in Torquay

Our clients purchased new residential homes as investments in Torquay. Two were in the same street, and one a little further away.  All close to amenities and within easy distance to the beach, making them ideal as long stay holiday homes or permanent rentals for professionals or families seeking a relaxed lifestyle. 

The size of the properties varied slightly; each with four bedrooms, kitchen, and dining areas, ensuite and family bathroom plus lock up garage. The properties were constructed between 2019 and 2020 and available for rent. All properties are eligible for depreciation allowances on both the Building (Division 43), and the Plant & Equipment Assets (Division 40). Typical depreciation deductions include:

  • air conditioning 
  • carpets, residential, plus artificial grass and matting
  • garage door motors
  • solar hot water 
  • kitchen appliances – dishwasher, exhaust and range hood, ovens, stoves
  • carpets, timber floor coverings
  • blinds
  • fire control and alarm systems, and 
  • ventilation fans.

Our NBtax team calculated significant annual deductions for each house ranging from $11,000 to $13,000. Over the next forty years, each of the investment properties would deliver hundreds of thousands of dollars in deductions for our client.

Here’s a quick snapshot of each property.

Property A

Property Depreciation over 40 years total $225,886. Property includes four bedrooms and 2 bathrooms, and three car garage. Constructed in May 2019.

Property B

Property Depreciation over 40 years total $254,305. Property includes four bedrooms and one main bathroom, and two car garage. Constructed in August 2019.

Property C

Property Depreciation over 40 years total $330,844. Property includes four bedrooms, two bathroom, and two car garage. Constructed in December 2020.

Construction costs ranged from approximately $192,000 to $330,000. Each property was leased from approximately $500 per week.

Torquay Property Market 

Our research into medium properties in the Torquay district in 2021 for existing second hand properties ranged $1,200,000 for houses to $870,000 for units. Typical rental income for houses is $600 per week with an annual rental yield of 2.6% and units rent for $500 per week with a rental yield of 3.0%. Based on five years of sales, Torquay has seen a compound growth rate of 12.4% for houses and 8.8% for units. 

In this case, our clients have gained significant benefits from building new homes for investment as the construction costs are less, and the building and assets will deliver greater tax benefits through depreciation allowances.  
 If you’ve built a new home as an investment, order your depreciation schedule online today.