How Does Depreciation Affect Capital Gains Tax When I Sell?

Quick Answer

Depreciation claims on investment properties reduce their cost base for Capital Gains Tax (CGT) purposes, potentially increasing the taxable gain when sold. Under Division 43, the capital works deductions claimed are subtracted from the property's cost base. This means a higher CGT liability may arise due to the reduced cost base. Consult a tax professional for personalised advice.