Division 43 is the category which addresses the building write-off component of your property. The historical construction costs include fees for preliminary items such as design fees, engineering and building approval costs. Where actual costs are not known, a quantity surveyor has estimated this amount by determining the appropriate costs for the building/structural improvement of the asset as at the date it was constructed. The percentage rate at which the building depreciates is dependent upon when construction commenced and the intended use of the building for i.e. commercial, manufacturing or residential purposes. This percentage will either be 2.5% or 4% and has been applied accordingly with respect to the information provided to us. In some cases, the Division 43 component will not be applicable to your property if it was constructed prior to 15th September 1987 or the structural improvements made on your property occurred prior to 27th of February 1992. It is worth mentioning that the only method of depreciation for any capital works is via the prime cost method. In cases where the property is used for other purposes such as commercial or manufacturing, the cut-off date for claims of depreciation on the construction cost (Division 43) differs that the asset owner may also claim 2.5% between 20th July 1982 through to 21st August 1984.

Division 40 is the category which covers assets that are easily removable from a building rather than attached or fixed. These include appliances and furnishings. Each item of plant or equipment within your property has an effective life measured in number of years. The effective life is determined by the tax commissioner under Taxation Ruling 2016/1. It is used to calculate the assets decline in value. Plant and equipment fall under the Division 40 asset class and are depreciated as per the following methods: Immediate write-off Eligible plant and equipment items with a cost of $300 or less qualify for an immediate full deduction and have been applied accordingly in the calculations. Low value pool Includes assets that are purchased in the current financial year worth less than $1,000 (low-cost assets) and also those assets that have been acquired prior to this current financial year and currently worth less than $1,000 (low-value assets) are eligible for the low-value pool; these are depreciated as follows: 18.75% in the first year (applicable to low cost assets only) 5% in the subsequent years (applicable to all assets less than $1,000) Effective life depreciation For any other items that do not fall within the above criteria as either low-value pooled items or immediately written-off, they will be depreciated as per the effective-life schedule. 2017 Budget The Federal Budget announcement for 2017 has proposed changes to claims of depreciation that may affect Australian Residential Property Investors whom are purchasing property after 7:30pm on the 9 th of May 2017. At time this article was written, Duo Tax Quantity Surveyors are not aware of this proposed legislation being formalized. However, we do inform all our clients of the possibility of this coming to fruition and how it will affect them.

FAQs Archive - Duo Tax Quantity Surveyors

9 07, 2020

What is Division 43?

By Brad Hibbard|2020-07-09T16:42:53+10:00July 9th, 2020|

Division 43 is the category which addresses the building write-off component of your property. The historical construction costs include fees for preliminary items such as design fees, engineering and building approval costs. Where

9 07, 2020

What is Division 40?

By Brad Hibbard|2020-07-09T16:41:28+10:00July 9th, 2020|

Division 40 is the category which covers assets that are easily removable from a building rather than attached or fixed. These include appliances and furnishings. Each item of plant or equipment within your

9 07, 2020

Does Duo Tax survey interstate properties?

By Brad Hibbard|2020-07-09T16:35:49+10:00July 9th, 2020|

Whether your property is in the heart of the city of Sydney or as interstate as the Great sandy desert, we can depreciate your property. We service Australia-wide with surveyors in every state.

9 07, 2020

Knocking down and re-building? tearing out a kitchen?

By Brad Hibbard|2020-07-09T16:28:55+10:00July 9th, 2020|

Before you demolish and destroy any existing plant and equipment or structural elements of the property such as an old kitchen and appliances, check with us to see if there is any residual

9 07, 2020

I am an overseas investor, can I claim depreciation?

By Brad Hibbard|2020-07-09T16:16:55+10:00July 9th, 2020|

If you are an overseas investor and looking at acquiring an investment property for the purpose of letting it out to tenants, by law you must lodge an Australian tax return. As such,

9 07, 2020

Can I claim office / commercial spaces and warehouses?

By Tuan Duong|2020-07-09T16:10:38+10:00July 9th, 2020|

In these properties, unlike a house, if you purchase and own the space to run your own business, the ATO will allow you to claim the depreciation on these as a deduction. If

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What is Division 43?

What is Division 40?

Does Duo Tax survey interstate properties?

Knocking down and re-building? tearing out a kitchen?

I am an overseas investor, can I claim depreciation?

Can I claim office / commercial spaces and warehouses?

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