Tax Depreciation Basics · Koste Knowledge Base

What is the difference between Division 40 and Division 43?

Published 26 June 2026 · Last updated 26 June 2026

Quick Answer

Division 40 generally covers plant and equipment assets, while Division 43 covers building structure and capital works. The difference matters because they are claimed differently and may affect CGT differently when the property is sold.

Division 40 and Division 43 are two major parts of property depreciation.

Division 40 usually includes:

Appliances
Carpet
Blinds
Air conditioning
Furniture
Equipment
Commercial plant
Loose assets

Division 43 usually includes:

Building structure
Construction costs
Extensions
Renovations
Built-in works
Capital improvements
Common property works

Why the difference matters:

Division 40 assets have effective lives.
Division 43 capital works are usually claimed over a longer period.
Second-hand residential Division 40 assets may be restricted.
Division 43 may still be available on second-hand properties.
Division 43 deductions may affect CGT cost base.
Division 40 assets are generally treated separately from the land and building cost base.

A good depreciation schedule should split these clearly for the accountant.

Frequently Asked Questions

Which gives faster deductions?

Division 40 assets often provide faster deductions, but eligibility depends on the rules.

Can second-hand residential Division 40 be claimed?

Annual depreciation may be restricted after the 2017 changes.

Is Division 43 still useful?

Yes. Division 43 can be significant, especially for new, renovated or commercial properties.

Does Division 43 affect CGT?

Yes, capital works deductions may affect cost base calculations.

Can Koste.ai separate them?

Yes. Koste.ai supports report workflows that separate Division 40 and Division 43.

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Written by Koste Team · Koste Chartered Quantity Surveyors · AIQS Member · RICS Member · TPB Registered · 1300 669 400 · info@koste.ai