Depreciation
Tax & Deductions
A tax deduction for the wear and tear on a building and its fixtures over time.
Full Explanation
The ATO allows property investors to claim deductions for the declining value of the building structure (capital works) and removable assets like carpets and appliances (plant and equipment). Depreciation is a non-cash deduction, meaning you receive a tax benefit without spending additional money. A quantity surveyor prepares a depreciation schedule that outlines claimable amounts each year.
Example
A depreciation schedule shows you can claim $8,500 this financial year across capital works and plant and equipment for your 2018-built townhouse.
Frequently Asked Questions
Can I claim depreciation on an older property?
Capital works deductions are available for buildings constructed after 15 September 1987. Plant and equipment on second-hand properties purchased after 9 May 2017 can only be claimed if you are the first user of the asset.
Do I need a depreciation schedule?
Yes. The ATO expects claims to be supported by a schedule prepared by a qualified quantity surveyor. The cost of the schedule itself is also tax-deductible.