Tag Archives: property depreciation

What You Need to Know About Depreciation of Property

Meaning of property depreciation

As the name suggests, property depreciation refers to the wear and tear of properties.

Even though generally property appreciates in value, as a property gets older, assets start to wear out and eventually need to be replaced.

This is good news for property investors if you are the owner of a property in Australia, you can claim this depreciation as a tax deduction.


This is as per the guidelines shared by ATO or the Australian Taxation Office.


Types of  property depreciation

To accurately claim the tax deduction, you must be aware of the two types of property depreciation.

The property’s structure includes roofs, ceilings, kitchen, bathrooms, retaining walls etc., as the structure begins to depreciate, it is referred to as capital works deductions.

  • Plant and equipment deductions

On the other hand, your property’s air conditioner, oven or carpet gets worn out, as these items are easily removable.

Depreciation of removable fixtures is referred to as plant and equipment deductions.

Claiming Depreciation

This is one of biggest claims available to property investors. Without having to outlay any money as they depreciate,

you can claim the depreciation deductions. It is considered a non-cash deduction.

Once you replace the assets you can claim any residual value available under the ATO rules and start claiming all over again with your new assets.