EBS 7: Depreciation | How Depreciation Hurts Capital Growth
Wed Feb 04 2026
Episode 7 shows there is no such thing as depreciation “benefits”. Depreciation is a detriment, not a benefit. We explain what depreciation really is, the unavoidable loss in a building’s value, and why tax deductions do not make you richer.
Clear examples show how a $10,000 claim might cut your tax by $4,000 yet still leave you $6,000 worse off, and how Division 43 claims reduce your cost base and increase future capital gains tax.
We separate depreciation from repairs, outline prime cost versus diminishing value methods, and test the theory against real markets, including off the plan units in Zetland that went backwards.
The rule of thumb is simple. Minimise depreciation, maximise land value, and favour established, supply constrained locations with room to add value.
Episode Highlights:
00:00 - Introduction
00:40 - What is depreciation?
07:26 - Divisions of tax law
10:52 - Diminishing value and prime cost
12:30 - Capital growth
13:21 - Tax example
17:56 - You don’t get it all back
19:41 - Maintenance
21:18 - Example - Back deck
30:16 - Depreciation “Benefits”
34:04 - Selling
35:11 - Bad advice
40:44 - High depreciation properties
45:13 - Conclusion
=============================================================
🎙️ Watch all Expert Busting episodes:
https://www.youtube.com/playlist?list=PLWD8h9iMOyGg14F66DTdoZuS63mUJwJ82
📚 Read the full data-backed articles:
https://suburbdata.com.au/education-expert-busting/
🔎 Learn how to use Suburb Data to analyse property data:
https://www.youtube.com/playlist?list=PLWD8h9iMOyGhDsFFEMdzP5fvfenYvbp0B
=============================================================
Expert Busting Series
A data-driven investigation into property myths.
We fact-check bold claims, expose misleading advice, and reveal what the numbers actually say.
Evidence over confidence. Data over hype.
#expertbustingseries #propertymyths #australianproperty #propertyinvesting #datadriveninvesting #suburbdata #DSR #propertytruths #realestateinvesting
=============================================================
DISCLAIMER
Please be aware that the content presented in this episode is for general informational purposes only and does not constitute financial advice.
• The information provided is not tailored to your individual circumstances, and we do not consider your specific financial situation.
• It is strongly recommended to consult with a qualified financial advisor or professional before making any financial decisions based on this content.
• We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and are not authorised to provide financial services.
• Any actions taken by listeners based on this content are at their own risk.
More
Episode 7 shows there is no such thing as depreciation “benefits”. Depreciation is a detriment, not a benefit. We explain what depreciation really is, the unavoidable loss in a building’s value, and why tax deductions do not make you richer. Clear examples show how a $10,000 claim might cut your tax by $4,000 yet still leave you $6,000 worse off, and how Division 43 claims reduce your cost base and increase future capital gains tax. We separate depreciation from repairs, outline prime cost versus diminishing value methods, and test the theory against real markets, including off the plan units in Zetland that went backwards. The rule of thumb is simple. Minimise depreciation, maximise land value, and favour established, supply constrained locations with room to add value. Episode Highlights: 00:00 - Introduction 00:40 - What is depreciation? 07:26 - Divisions of tax law 10:52 - Diminishing value and prime cost 12:30 - Capital growth 13:21 - Tax example 17:56 - You don’t get it all back 19:41 - Maintenance 21:18 - Example - Back deck 30:16 - Depreciation “Benefits” 34:04 - Selling 35:11 - Bad advice 40:44 - High depreciation properties 45:13 - Conclusion ============================================================= 🎙️ Watch all Expert Busting episodes: https://www.youtube.com/playlist?list=PLWD8h9iMOyGg14F66DTdoZuS63mUJwJ82 📚 Read the full data-backed articles: https://suburbdata.com.au/education-expert-busting/ 🔎 Learn how to use Suburb Data to analyse property data: https://www.youtube.com/playlist?list=PLWD8h9iMOyGhDsFFEMdzP5fvfenYvbp0B ============================================================= Expert Busting Series A data-driven investigation into property myths. We fact-check bold claims, expose misleading advice, and reveal what the numbers actually say. Evidence over confidence. Data over hype. #expertbustingseries #propertymyths #australianproperty #propertyinvesting #datadriveninvesting #suburbdata #DSR #propertytruths #realestateinvesting ============================================================= DISCLAIMER Please be aware that the content presented in this episode is for general informational purposes only and does not constitute financial advice. • The information provided is not tailored to your individual circumstances, and we do not consider your specific financial situation. • It is strongly recommended to consult with a qualified financial advisor or professional before making any financial decisions based on this content. • We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and are not authorised to provide financial services. • Any actions taken by listeners based on this content are at their own risk.