Frequently Asked
Questions

In addition to this, your property may have undergone refurbishment works more recently. It will also attract both building allowances and plant and equipment depreciation. Therefore, it is worthwhile to talk to a qualified Quantity Surveyor before you decide the property is too old for depreciation deductions.

The Government made some changes affecting Division 40 (Plant and Equipment) assets on properties acquired after the 9th May 2017 7:30 pm AEST which were classified as second hand.

Koste still includes Division 40 assets in your report, as you can still claim the deduction as a capital loss. It is equal to the difference between an asset’s original cost/value and its termination value. In the other words, it may be offset against any future capital gain. Please note that the new legislation does not affect new assets purchased for the second-hand property. Subsequently, new assets will be deducted in the usual way and shown in your report.

The Government changes do not restrict the ability of an investor to claim Division 43 building write-off deductions for a residential rental property acquired after 7.30 pm on 9 May 2017.  Depreciation claims in respect of commercial properties and properties used in the course of carrying on a business will also not be affected by the recent depreciation changes.

Any questions of further details can be sought by calling a member of our technical team on 1300 669 400 or contact us via our chatbot.

Still unsure? Talk to us via online chat or phone us at 1300 699 400, or drop us an email  by info@koste.com.au

Consider the following illustrative scenario as an example:

You purchased your first home in May 2015 and lived there until Jan 2019. In Dec 2015 when you were living there, you installed solar panels and added a carport. In Jan 2019 when you were moving out, you upgraded the cooktop and oven to attract tenants. In Sep 2019 when the tenants were living there, you changed a broken ceiling fan. Can the items mentioned above all be counted as your depreciation?

We show 40-year schedules for both the diminishing value method and the prime cost method. In other words, your tax depreciation report is valid for 40 years. ATO sets the effective life of capital allowances and capital works for the items. Therefore, the amounts of depreciation each year will not be increased by showing fewer years in the schedule.

As an Australia resident for tax purposes, you are eligible to claim tax depreciation from your overseas investment properties. Our Directors have experience in completing Tax Depreciation Schedules on many properties throughout cities of the world including Dubai, London, Singapore, New York, and Auckland. Furthermore, Our team uses local construction costs to calculate build costs, utilizing the current exchange rates between the property location currency and Australia (AUD). 

Yes, you can amend your previous tax returns to include missed depreciation deductions, typically up to two years, as per the amendment provisions in the Income Tax Assessment Act 1997 (ITAA 1997). Consult your tax advisor for specific guidance.

Depreciation for commercial properties includes both Division 43 (Capital Works) and Division 40 (Plant and Equipment) of the ITAA 1997. A tailored depreciation schedule can help maximise deductions by identifying eligible assets and their effective lives. Learn more about our Commercial Tax Depreciation Services

The 2017 budget changes, effective from 1 July 2017, affected second-hand properties. Properties purchased after 9 May 2017 can no longer claim depreciation on previously used Plant and Equipment assets, as outlined in the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017. Capital Works deductions remain unaffected.

Update your depreciation schedule whenever significant changes or improvements are made to your investment property to ensure accuracy and claim all available deductions. Regular reviews can help identify new assets eligible for depreciation.

Yes, you can claim depreciation on both new and old investment properties under Division 40 (Plant and Equipment) and Division 43 (Capital Works) of the ITAA 1997. Learn more about Tax Depreciation.

Division 40 covers depreciation of Plant and Equipment assets, which are removable items like appliances and furniture. Division 43 covers Capital Works deductions, which include structural and fixed items like walls, roofs, and kitchen cabinets. These sections are part of the ITAA 1997.

Yes, you can claim Capital Works (Division 43) deductions for renovations done by previous owners if the renovations were completed after 27 February 1992, as per ITAA 1997 guidelines.

Yes, even older properties can yield substantial depreciation deductions, especially if renovations have been done. A Quantity Surveyor can assess and provide an accurate depreciation schedule, ensuring compliance with ITAA 1997.

A tax depreciation schedule is a detailed report prepared by a qualified Quantity Surveyor that outlines the depreciation deductions available for an investment property, as per Division 40 and Division 43 of the ITAA 1997. It helps property investors maximise their tax deductions. Order a Tax Depreciation Report.

To maximize your depreciation deductions, ensure you have a detailed and comprehensive depreciation schedule prepared by a qualified Quantity Surveyor. Regularly update your schedule to include new assets or improvements to your property, as specified in ITAA 1997.

Immediate write-offs, as defined in ITAA 1997, allow you to deduct the full cost of certain assets in the year they are purchased. These typically apply to assets under a specific value threshold, updated annually by the ATO.

Yes, if you co-own a property, you can claim depreciation based on your ownership percentage, as outlined in ITAA 1997. Each owner should obtain a depreciation schedule reflecting their share of the property.

Maintain detailed records of purchase dates, costs, and descriptions of all assets and improvements. This documentation supports your depreciation claims and ensures accuracy in your schedule, complying with ITAA 1997 requirements.

Yes, newly built properties are eligible for depreciation deductions. You can claim both Plant and Equipment depreciation (Division 40) and Capital Works deductions (Division 43) as per ITAA 1997.

Depreciation can typically be claimed for 40 years from the construction completion date for Capital Works (Division 43) and over the effective life of assets for Plant and Equipment (Division 40), as per ITAA 1997.

Plant and Equipment depreciation refers to the deduction of the decline in value of removable assets within a property, such as appliances, carpets, and furniture, under Division 40 of the ITAA 1997.

Capital Works depreciation refers to the deduction for the decline in value of structural and fixed items within a property, such as walls, roofs, and plumbing, under Division 43 of the ITAA 1997.

Yes, energy-efficient upgrades can provide additional tax benefits. Ensure these improvements are included in your depreciation schedule to maximize your deductions, as per relevant sections of ITAA 1997.

Yes, holiday rental properties are eligible for depreciation deductions. Both Plant and Equipment and Capital Works can be depreciated, in line with ITAA 1997 guidelines.

A depreciation schedule helps you claim maximum tax deductions for the depreciation of your property’s assets and improvements, reducing your taxable income and increasing your cash flow, in accordance with ITAA 1997. Learn more about our Services.