What Is the Low Value Pool?
The Low Value Pool (LVP) is an ATO mechanism that allows you to group low-value plant and equipment assets together and depreciate them at an accelerated rate:
- Year of acquisition: 18.75% of cost (half the annual rate, reflecting a "half-year" rule)
- Subsequent years: 37.5% of the pool's written-down value (diminishing value)
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Which Assets Can Go Into the Pool?
Two categories of assets can be added to the Low Value Pool:
1. Low-Cost Assets
Assets with an original cost of $1,000 or less (excluding assets used partly for private purposes).2. Low-Value Assets
Assets that had an original cost of more than $1,000 but whose written-down value has fallen below $1,000 in a later income year (using the diminishing value method).---
Why This Matters in Practice
Consider a property with a range of smaller Division 40 assets:
| Asset | Cost | Standard Eff. Life | Standard Year 1 (DV) | |---|---|---|---| | Smoke detectors (×4) | $200 | 6 years | $25 | | Exhaust fans (×3) | $450 | 10 years | $56 | | Clothesline | $300 | 10 years | $38 | | Garden hose/fittings | $120 | 5 years | $15 | | Doorbell | $80 | 10 years | $10 | | Total | $1,150 | | $144 |
Using the Low Value Pool instead:
- Year 1 deduction: 18.75% × $1,150 = $216
- Year 2 deduction: 37.5% × ($1,150 − $216) = $350
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The Interaction with the 2017 Budget Rules
For residential investors who purchased an existing property after 1 July 2017, the 2017 budget rules restricting Division 40 claims also apply to Low Value Pool assets. If an asset was in the property when you purchased it, you cannot pool it.
However, any assets you purchase and install yourself after settlement are fully poolable regardless of property age.
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Immediate Write-Off for Very Small Assets
Under current ATO rules, assets costing $300 or less can be immediately deducted in full in the year of purchase, rather than depreciated. This is separate from and applies before the Low Value Pool.
So a $250 doorbell or a $180 smoke detector can potentially be deducted in full in Year 1.
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How Koste Handles Low Value Pooling
When Koste prepares your depreciation schedule, our qualified quantity surveyors:
This ensures you're maximising your deductions from every asset in the property — not just the big-ticket items.
The difference between a well-prepared schedule and a basic one is often $500–$1,500 in additional first-year deductions, just from correctly handling the low value pool.
Order your depreciation schedule → or try the free Tax Depreciation Calculator to estimate your property's total deductions.