Tax depreciation on a unit or apartment
Units and apartments are among the most popular investment property types in Australia, and they can generate strong depreciation deductions — especially if the building is newer and well-constructed.
Division 43 — Capital works
The capital works deduction covers the structural portion of your apartment. This includes your unit's:
- Concrete slab and structural walls
- Roof (your proportional share of the building roof)
- Bathroom and kitchen structural components
- Built-in wardrobes, staircases
- Balcony structure
Construction cost determines the deduction. A large apartment in a premium building in a major city can produce significant Division 43 deductions.
Division 40 — Plant and equipment
Within your unit, the following assets can be claimed:
- Oven, cooktop, dishwasher
- Air conditioning
- Hot water system
- Carpet and floating floors
- Blinds and curtains
- Smoke alarms
New apartments: the best outcome
An off-the-plan or brand-new apartment gives you:
- Full Division 43 on the entire building construction cost
- Full Division 40 on all appliances and fittings
Common property
Your strata levy entitles you to a share of the common property. A quantity surveyor can include your proportional share of common area construction costs in your depreciation schedule, adding thousands of dollars in additional deductions over the building life.
Older buildings
Apartments in buildings constructed before July 1985 cannot claim Division 43 capital works. However, any renovations or additions made after that date — even to an older building — can be claimed from the date of those works.