Claiming smoke alarms and safety compliance items
Australian states and territories increasingly require landlords to upgrade their rental properties to meet safety standards — hardwired smoke alarms, RCD safety switches, and pool fencing are common examples. The good news is that these costs are generally tax deductible, though the classification matters.
Smoke alarms
Battery-powered or wireless smoke alarms: These are Division 40 plant and equipment. They have an ATO effective life and are depreciated using either the diminishing value or prime cost method. If replacing an existing alarm, the old unit can be written off (scrapped) at the same time.
Hardwired smoke alarms: If the installation requires electrical wiring and integration into the building's electrical system, the work has a capital works component (the wiring and structural installation is Division 43) and a plant and equipment component (the alarm unit itself is Division 40).
Safety switches (RCDs)
Residual current devices (safety switches) installed to the switchboard are generally Division 40 plant and equipment. If the installation involves switchboard upgrades that form part of the building's electrical infrastructure, some costs may be Division 43.
Other common compliance items
| Item | Treatment | |------|-----------| | Pool fencing | Division 43 capital works (structural) | | Balcony balustrades | Division 43 capital works | | Compliance lighting (emergency exit) | Division 40 plant and equipment | | Window locks and security screens | Division 40 plant and equipment | | Carbon monoxide detectors | Division 40 plant and equipment |
Immediately deductible vs depreciated
If the item costs less than $300 and has an effective life of less than 1 year, it may be immediately deductible. Most smoke alarms and safety switches cost more than $300 when installed, so they are depreciated rather than claimed outright.
Low value pooling
Assets costing between $300 and $1,000 can be pooled in the low value pool and depreciated at 18.75% in the first year and 37.5% per year thereafter — which is often faster than the standard effective life method.