You don’t need to be a depreciation expert but understanding some of the key concepts surrounding this complex area of taxation can help your ongoing investment strategy.
1. Capital works deduction
This is the depreciation deduction you can claim on the structural component of the building and any fixed assets. Some common examples include walls, doors, roofing, sinks and built-in kitchen cabinetry.
Capital works deductions can be claimed under division 43 at a rate of 2.5 per cent for up to forty years on any residential property where construction commenced after 15 September 1987. But if a property is older than this and has undergone a structural renovation, such as retiling a kitchen, some capital works deductions will be available.
2. Plant and equipment
This category of depreciation refers to the easily removable or mechanical fixtures and fittings in a property. Floor coverings, furniture and air-conditioning units are some examples…
View original post 343 more words