What are capital works derivations?
Understanding tax depreciation lingo can sometimes be confusing but as an investor, it’s important that you simply have an honest understanding of the depreciation deductions you'll claim to make sure you’re getting the foremost out of your investment property. As outlined by the Australian Taxation Office there are two categories that structure depreciation deductions - division 43 capital works deductions and division 40 plant and equipment depreciation. Capital works deductions are tax deductions an investor can claim for the wear and tear and tear that happens to the structure of the property and items considered to be permanently fixed to the property. This includes any structural improvements which will are made during a renovation within the relevant dates. In a residential property, capital works deductions cover the subsequent items: Bricks, mortar, walls, flooring and wiring Built-in kitchen cupboards Clothes lines Doors and door furniture (h