Question 1

What is property depreciation?

Accepted Answer

Property depreciation is a non-cash tax deduction that allows investors to claim the wear and tear of a building and its fittings over time. It is split into Division 43 (capital works on the structure) and Division 40 (plant and equipment).

Question 2

What is the difference between Division 40 and Division 43?

Accepted Answer

Division 43 covers the structural components of the building — walls, roof, flooring — and depreciates at 2.5% per year over 40 years. Division 40 covers removable assets like carpets, ovens, and air conditioners, which depreciate at varying rates based on their effective life.

Question 3

Do I need a quantity surveyor to claim depreciation?

Accepted Answer

The ATO requires a tax depreciation schedule prepared by a qualified quantity surveyor to substantiate Division 43 claims on existing properties. Our calculator provides estimates; a formal schedule is required for your tax return.

Question 4

Can I claim depreciation on a second-hand property?

Accepted Answer

Since May 2017, Division 40 (plant and equipment) deductions are only available on brand-new assets you install. For established properties, you can still claim Division 43 capital works if the building was constructed after 15 September 1987.

Depreciation Calculator