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 (handles, locks etc.)
Driveways
Fences and retaining walls
Sinks, basins, baths and toilet bowls
Some common items in commercial properties which will be claimed as capital works deductions include:
Bricks, mortar, walls, flooring, roofing and wiring
Sinks, tiles, basins and toilet bowls
Mezzanines
Ducting for air con


Generally, any residential building where construction commenced after 15 September 1987 will allow the owner to capital works deductions at a rate of two .5 per cent per annum for up to forty years.


If your property was constructed before these dates, it’s still important to urge in-tuned with a professional quantity surveyor like BMT Tax Depreciation as often these buildings will have undergone some sort of renovation which may end in capital works deductions for the owner.


For more information, Request a Quote online or call BMT on 1300 728 726.
BMT Tax Depreciation is Australia’s leading supplier of residential and commercial tax depreciation schedules.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is that the Chief military officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit bmtqs.com.au for Australia-wide service.

For more info:- Finance Brokers Brisbane

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