Tax Depreciation Schedules for Older Properties

A common misconception is that there is little or no depreciation that can be claimed on older properties.

In fact depreciation on plant and equipment can be claimed regardless of the age of the property.

Tax Depreciation on Plant & Equipment

Division 40 and 42 of the Income Tax Act lists over 1,500 items of plant and equipment relative to income producing buildings that can be claimed.

These include items such as stoves, dishwashers, carpets, curtains, hot water units and the like.

Items of plant under Division 40 and 42 can be claimed regardless of when they were first installed.

Tax Depreciation Deductions on Capital Works Items- Applicable Dates

Building write-off on capital works generally relates to anything not classified as plant and equipment and can be claimed under Division 43 of the Tax act on all residential buildings built after 17th July 1985 and structural alterations after 26th February 1992.

Division 43 items include the building structure and cladding, kitchen cupboards, sinks, toilets, paving, fences and the like.

Building write-off is generally allowed at 2.5% per annum over 40 years. Therefore a building constructed in 1985 and purchased in 2015 still has 10 years of building write-off that can be claimed in a Tax Depreciation Schedule.

A building that was built say in the 1960’s would have no building write-off allowance claimable on the original building, however more recent upgrades that have occurred since 1985 would be claimable. This would include such items as kitchen and bathroom renovations, extensions, roof guttering or window replacements as well as painting and the like.

Quantity Surveyors Specialist Skill

An experienced Quantity Surveyor with particular experience in housing over many years is able to ascertain the extent of such works during the course of a building inspection.

Tax Depreciation Benefits for older Properties

In summary, older buildings can still be depreciated and it is certainly worthwhile to engage a Quantity Surveyor to prepare a Tax Depreciation Schedule for such properties.

The Deductions will not be as great as those of new properties, but none the less they are still significant and it is always worthwhile to obtain a Tax Depreciation Schedule.

There are still $1,000’s of dollars in deductions that can be claimed each year.