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 demolishedDivision 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 movedCalculate Your Benefits