Furnished properties and depreciation

Are furnished properties a better proposition? There are no right or wrong answers when deciding whether to furnish your investment property; but there could be big tax savings in doing so, making it more appealing.

Furnished rentals tend to attract tenants looking for a short-term arrangement such as travellers and business professionals who regularly move for work.

In difficult times like these, anything that you can do to make your property stand out from the numerous others, could be worthwhile.

Whether furnished properties allow you to charge a higher rental rate, or attract a tenant, the cost may be an investment.

Furnishing you property may also decrease the amount of time between tenancies by allowing tenants to move in quickly.

Investors often don’t consider the advantage of additional tax depreciation deductions available on furniture. If a furniture asset was purchased directly for an investment property, you can claim deprecation.

Furniture is a type of plant and equipment asset. Furniture with a value less than $1,000 can be deducted using a low-value pool, allowing it to be depreciated at an accelerated rate 18.75 % in the year of purchase, then 37.5 % every year following. Higher valued furniture depreciates at a rate set by the Australian Taxation Office, based on each item’s effective life, or how long it can be used to produce income.

A tax depreciation schedule is the best way to ensure you claim all deductions you’re entitled to. We use BMT often; last year they have found that residential property investors can average almost $9,000 in first full financial year deductions.


Feel free to contact one of the MKA team who can discuss what's involved in getting a tax depreciation schedule.

Call us on (03) 9585 755 or email us at enquiries@mktax.com.au