5 Ways for Maximizing Depreciation Deductions for a Commercial Space

If you’re planning to purchase a commercial space, then claiming depreciation deductions should be the foremost priority. As you claim depreciation deductions, you would be able to save a lot of money every year. Depreciation deduction is nothing but the difference between the negatively geared investment and the positive cash flow. But, even as you claim a depreciation tax deduction on rental property, you would be able to improve the financial position of the business. So, here are some ways through which you can maximize the depreciation deductions for your commercial space.

1. Think about ownership to your benefit

When you purchase a commercial property, you can claim for a single entity and thereby increase the deduction. This is only applicable if you’re managing the business from a certain location. When it’s time to claim the depreciation, you may take into account the actual building as well as some items like fittings and fixtures. But, in this case, the fixtures have to be set up at the location from where you are managing the business.

2. Get in touch with an expert

All property investors usually contact quantity surveyors. These are experts who specialize in deducting the tax depreciation. Once the expert inspects and evaluates the property, he would then proceed with a tax depreciation schedule. Such a schedule would help to foresee deductions that you can claim up to 40 years. Moreover, once you approach one of the reputed tax depreciation surveyors, you could think about ongoing profitability and financial planning.

3. Maintain a record of the costs

To keep a track of depreciation deductions properly, you should always remember to maintain a record of various costs. You could note down the running costs, the daily expenses, and the upfront costs. However, when you keep a record of the costs on a regular basis, you should consider the financial transactions for your business and the commercial investment property. Besides, you should always take into account the expenses and the costs associated with the assets.

4. Think about the best depreciation method

When you speak with a quantity surveyor, the expert may suggest a depreciation method for the investment property. For short-term investment, the surveyor opts for the ‘diminishing value’ method. But, for long term ownership, the expert may move ahead with the ‘prime cost’ method. Regardless of the method, both can help you save a lot of money. The surveyor could further choose the method depending on the situation. If you wish to know the depreciation limits, then you should refer to tax depreciation tables 2015.

5. Always seek the benefit from the ‘first year’

During the first year, you can expect maximum depreciation deduction. While you can observe more depreciation on assets or certain items, you can insist on the expert to use a reliable tool. This can actually save time when the surveyor tries to maximize the upfront savings you can gain through depreciation.


If you hardly have the time to calculate the depreciation, then you can seek assistance from experts. But, if you consider purchasing a property while planning ahead, then it’s better to speak to an experienced quantity surveyor. Way ahead, you can request the expert to come up with a depreciation schedule. This would help you know more about the depreciation amount for various assets depending on the asset’s life. Just in case you tend to pay more taxes, then you can request tax refunds a bit later.