Division 43 vs Division 40: Capital Works vs Plant Equipment Tax Depreciation Guide
Master the difference between Division 43 capital works and Division 40 plant & equipment depreciation to maximize your property tax deductions legally and effectively.
Understanding Capital Works vs Plant & Equipment Tax Depreciation
The key to maximizing your property tax depreciation lies in understanding the difference between Division 43 (capital works) and Division 40 (plant & equipment). Each has different rules, rates, and benefits that savvy investors leverage strategically.
The Fundamental Difference
Division 43: Capital Works (Building Structure)
What It Covers: The permanent building structure and integral components
Depreciation Rate: 2.5% annually for 40 years
Key Characteristic: Items that would be damaged or destroyed if the building were demolished
Division 40: Plant & Equipment (Removable Assets)
What It Covers: Assets that can be removed without damaging the building structure
Depreciation Rate: Varies (3-25 years effective life, some up to 100% first year)
Key Characteristic: Items you could theoretically take with you if you moved