Free investor tool
Depreciation calculator
Estimate the depreciation deductions on an investment property, split into the building (capital works) and its fittings (plant and equipment), and what they could save you in tax.
Updated · Free, no sign-up
| Year | Capital works | Plant and equipment | Total deductions | Tax saving |
|---|---|---|---|---|
| 1 | $7,000 | $0 | $7,000 | $2,240 |
| 2 | $7,000 | $0 | $7,000 | $2,240 |
| 3 | $7,000 | $0 | $7,000 | $2,240 |
| 4 | $7,000 | $0 | $7,000 | $2,240 |
| 5 | $7,000 | $0 | $7,000 | $2,240 |
| 6 | $7,000 | $0 | $7,000 | $2,240 |
| 7 | $7,000 | $0 | $7,000 | $2,240 |
| 8 | $7,000 | $0 | $7,000 | $2,240 |
| 9 | $7,000 | $0 | $7,000 | $2,240 |
| 10 | $7,000 | $0 | $7,000 | $2,240 |
How it works
Capital works and plant and equipment
Capital works deductions (Division 43) cover the building itself. For residential construction that started after 15 September 1987 you can generally claim 2.5% of the construction cost each year for 40 years from completion, whether you bought new or established.
Plant and equipment (Division 40) covers removable items like appliances, carpets and blinds. Since 9 May 2017, investors can't claim these items in a second-hand residential property, so the deduction mostly applies to brand-new properties. A quantity surveyor's schedule sets the actual figures; depreciation also reduces your cost base for capital gains tax.
The numbers are one part of the decision
We look at the figures alongside growth drivers, vacancy, supply and how a property fits your borrowing and portfolio plans, then choose the market that suits your strategy, wherever it is in Australia. See how we buy investment property.
FAQ
Common questions
Can I claim depreciation on an older property?
You can claim capital works on the building if construction started after 15 September 1987 and it is less than 40 years old, including on the cost of renovations the previous owner did. Plant and equipment in a second-hand property generally can't be claimed.
Do I need a quantity surveyor?
In most cases, yes. The construction cost is often unknown to buyers, and a registered quantity surveyor's depreciation schedule is the accepted way to establish it.
Does depreciation affect capital gains tax?
Capital works deductions you claim reduce the property's cost base, which increases the capital gain when you sell.
Is this tax advice?
No. It is a general estimate to help you compare options. It does not consider your personal circumstances, and results depend on the figures you enter. Check them with your accountant, mortgage broker or financial adviser before you act.
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