Maximise Taxation Depreciation Claims on Your Property
The Division 43 Building Allowance
The Division 43 building allowance is an annual deduction based on a set percentage of the building's original construction cost. The percentage varies between 2.5% and 4.0% depending on when construction commenced and for what the building is used.
Residential Properties
If construction of your residential property commenced after 17th July 1985, it will qualify for the Division 43 construction allowance. The deduction becomes available from the date you place the house or unit on the rental market. You will qualify for the Division 43 allowance regardless of how previous owners used the property. In addition, you will be eligible to depreciate many items within the house or unit (such as floor coverings and white goods) regardless of age of the property.
Commercial Properties
If construction of your commercial property commenced after 19th July 1982, it will qualify for the Division 43 construction allowance. The deduction becomes available from the date the premises were used by yourself for income producing purposes. In addition you will be eligible to depreciate many items within the building (such as floor coverings, air conditioning and fire alarm systems) regardless of the age of the property.
Strata Title Properties
Owners of units in strata titled buildings are entitled to claim the Division 43 building allowance on their share of the strata building's construction cost. In addition, unit owners are also entitled to depreciate their share of the common plant and equipment (such as lifts, pumps and generators, air conditioning and fire alarm systems). The Australian Tax Office has ruled that the tenants in common can claim income tax deductions for depreciation for their share of jointly owned property (IT 2398).
Determining the deduction | Taxation Depreciation for building owners
