Can I claim demolition costs on an investment property?
Published 26 June 2026 · Last updated 26 June 2026
Quick Answer
Demolition costs may have different tax treatment depending on why the demolition occurred and what is being built or removed. They may relate to capital works, scrapping, asset disposal or the cost of new construction, so accountant advice is important.
Demolition can be complex.
It may involve:
Removing old assets
Demolishing part of a building
Preparing for renovations
Replacing damaged areas
Removing commercial fit-out
Tenant make-good works
Full redevelopment
New construction
Potential tax issues:
Scrapping old assets
Capital works write-off
Demolition as part of new capital works
Cost base implications
Repair versus improvement
Private versus rental use
Commercial versus residential treatment
The best approach is to get advice before demolition.
Koste.ai can help investors record what is being removed and request a pre-demolition review.
Frequently Asked Questions
Are demolition costs deductible?
It depends on the reason and circumstances.
Should I get advice before demolition?
Yes. This can protect scrapping and cost records.
Can removed assets be written off?
Possibly, if they had remaining value and are documented.
Does demolition affect CGT?
It may, depending on the cost base treatment.
Can Koste.ai help?
Yes. Koste.ai can support pre-demolition record collection.