Tax depreciation calculator
Explore potential Australian investment-property deductions under Division 43 capital works and, where supported by your circumstances, Division 40 plant and equipment. This calculator provides an indicative estimate, not a tax depreciation schedule or personal tax advice.
How much depreciation can I claim?
The result depends on property age, original construction expenditure, purchase date, renovations, property type, eligible Plant & Equipment and Capital Works, second-hand residential restrictions and ownership circumstances. Use the existing calculator for an indicative estimate, not a tax assessment.
See what a full report looks like · Is a schedule worthwhile? · Work with your accountant
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What this calculator estimates
Start with your property category, approximate construction age, internal floor area and location. Use a known construction year and measured area where you have them rather than guessing. These details help estimate capital works; the calculation uses construction information, not the purchase price or property value. Residential and commercial property follow different eligibility paths, so choose the category that reflects the actual use of the premises.
Read the labels beside each result. A full-year deduction is an illustration for a complete income year, not necessarily your first tax return. Where sufficient timing information supports it, an actual first-year amount can be shown separately. Five-year figures describe an estimated projection, not five guaranteed claims. The remaining capital works entitlement and estimated years remaining are different from the original qualifying construction cost.
Division 40 is not automatically included in every result. If the supported calculation returns only Division 43, treat it as capital works only. An excluded or review status for plant and equipment is not evidence of an additional deduction. Missing facts can require professional review rather than a numeric result. A range expresses an indicative estimate; it does not certify eligibility or guarantee an assessment outcome.
Division 43: the building and capital works
Division 43 deals with qualifying construction expenditure on buildings and capital works, rather than the value of the land or the market price paid for a property. Walls, roofing and qualifying structural improvements can fall within this category. The relevant construction commencement date helps determine the applicable regime, while completion and income-producing use matter when working out the period for which a deduction is available.
For ordinary residential construction commenced from 16 September 1987, the usual deduction rate is 2.5% over 40 years from completion, subject to eligibility and qualifying use. This is not a universal rule for every building. Residential construction commenced from 18 July 1985 to 15 September 1987 can fall within a 4% regime over 25 years. Certain earlier contracts and other construction categories have different treatment. An older building may have exhausted its original entitlement but still contain later qualifying works.
Buying an existing property does not restart the capital works period. The purchaser may have access to the remaining eligible period, subject to the evidence and their circumstances. Renovations and additions need their own construction history rather than being treated as part of the original building. Keep invoices, construction dates and records of rental use so an adviser can distinguish original works, later improvements and periods of private use.
Division 40: plant, equipment and the 2017 restrictions
Division 40 concerns eligible depreciating assets such as appliances, carpets and air-conditioning equipment. Asset classification, ownership, previous use and income-producing use all matter. It is separate from the building's capital works entitlement. A property can therefore have eligible Division 43 deductions even when its existing plant and equipment cannot be depreciated by the current owner.
ITAA 1997 section 40-27 limits deductions for certain previously used assets in residential rental property. For many individual investors acquiring existing residential property at or after 7:30pm AEST on 9 May 2017, previously used plant is generally restricted. The rules apply from the 2017–18 income year and also affect assets previously used privately. An acquisition before the cutoff does not by itself settle every later change-of-use question; the timing of rental use and installation can also matter.
This is not a blanket ban on all Division 40 deductions. New assets bought and installed for qualifying rental use may be eligible. Brand-new property requires the relevant facts about prior use and ownership, rather than simply a recent construction year. Commercial premises are not subject to the same second-hand residential restriction. Excluded entities, including corporate tax entities, and business-use exceptions can have different treatment. Ask your tax adviser to confirm the applicable exception; being an investor does not automatically mean carrying on a business.
An illustrative property scenario — estimate only
Consider an existing house whose construction commenced in 2004 and that is now used as a residential rental. Its original qualifying capital works may still have a remaining deduction period. The calculator can use the house category, construction age, internal floor area and location to illustrate a potential capital works range. That is not a valuation of the house, and paying more for it would not by itself create more construction expenditure.
If an individual bought this previously occupied house after the 2017 cutoff, the existing used appliances may be restricted even though capital works remain eligible. A new dishwasher bought by that owner for rental use needs a separate eligibility assessment. Renting the house for only part of the income year can also change the actual first-year claim. No dollar outcome is promised in this example: construction evidence, exact dates, ownership and use must be checked before preparing a schedule.
From an estimate to evidence for your tax return
Use the result to decide what information to gather and whether to request a professional assessment. A Koste tax depreciation schedule considers property-specific construction and asset information, available records and inspection evidence as appropriate. It supports you and your accountant in preparing a tax return; it is not itself a tax return lodged with the Australian Taxation Office, nor does an online estimate constitute ATO approval.
Bring building plans, renovation invoices, previous schedules, settlement information and rental-use dates where available. Tell the assessor about private use, changes of use and replacement assets. Fees for obtaining construction cost information from an appropriately qualified person can generally be deductible in the year paid, subject to your circumstances. Confirm the treatment with your tax adviser. Keep your schedule and supporting records, including information relevant to capital works adjustments when the property is eventually sold.
Tax depreciation calculator FAQs
Is the calculator result a tax depreciation schedule?
No. It is an indicative estimate for planning. A professional schedule uses property-specific evidence and applicable eligibility rules to support tax-return preparation. You and your accountant still need to confirm the claim, the rental-use period and the supporting records. The estimate is not an ATO lodgement document or approval.
Does this calculator use my purchase price?
No. Purchase price and property value do not determine this depreciation estimate. The core construction inputs are property category, construction age, internal floor area and location. Buying land or paying a higher market price does not establish additional qualifying construction expenditure.
Will every estimate include Division 40 deductions?
No. Division 40 depends on the assets, taxpayer, ownership and use. Supported eligible amounts may appear separately; restricted or uncertain plant must not be added to deductible totals. If the result only provides Division 43, it should be read as a capital works estimate, not as a combined plant-and-building claim.
What changed for second-hand residential assets in 2017?
ITAA 1997 section 40-27 generally restricts previously used residential rental assets for affected investors acquiring them at or after 7:30pm AEST on 9 May 2017. Private use and the timing of installation or rental use also matter. New qualifying assets, excluded entities and certain business or non-residential uses can have different treatment; obtain advice on the specific facts.
Can a property built before 1987 still have capital works deductions?
Possibly. Construction commenced from 18 July 1985 to 15 September 1987 can fall within a different residential regime, although its original deduction period may now be exhausted. Later qualifying renovations or additions can have a separate remaining period. Other construction categories have different commencement thresholds. A building year alone is not enough to establish a current claim.
Is a full-year estimate the same as my first-year claim?
Not necessarily. A full-year estimate assumes a complete income year of qualifying use. Your actual first-year deduction can depend on completion, ownership, when assets were ready for use and the income-producing period. Read the result labels and assumptions; a five-year projection is also not a guarantee of future deductions.
Does buying an older rental property restart its depreciation period?
No. Buying the property does not restart the Division 43 period for existing capital works. Any remaining eligible entitlement depends on the original completion date and applicable regime. Later works must be assessed separately, and plant and equipment have their own rules about remaining life, prior use and eligibility.
What should I do after receiving my estimate?
Keep the result as a planning reference, collect construction and renovation records, and discuss eligibility with your accountant. You can order a Koste schedule or call 1300 669 400 to discuss the property. A professional assessment helps establish the evidence for a claim rather than turning an indicative result into a guaranteed tax saving.
Check the official guidance
Order a Koste schedule or call 1300 669 400.
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Clear answers to common property, construction and tax depreciation questions.