Choice of Depreciation Method and Debt Recycling Should you use Prime Cost Method or Diminishing Value Method when claiming depreciation? This topic is discussed here: Depreciation: Prime Cost Method vs. Diminishing Value Method There is a potential advantage for claiming the method that gives you the greatest return early on. Claiming higher depreciation will result in great tax deductions with the money saved being able to be used to debt recycle – pay down the non-deductible debt and reborrow to invest. You will be converting non-deductible debt into deductible as well as increase the asset base quicker for maximising compounding. Where you renting out the property immediately this may be the Diminishing Value Method. Where renting the property out later it may be the prime cost method. Seek the advice of your tax advisor to work this out. The savings may initially be relatively minor, but with the effects of compounding the impact of the savings will grow.