Guides to Commercial Property Depreciation

What is Commercial Depreciation?

Commercial property depreciation refers to the tax deductions an investor is eligible to claim on their commercial investment property.

A commercial investment property could be an office, retail store, industrial warehouse or another non-residential premises.

As the property ages, the ATO recognises that there is wear and tear on the building and its fixtures/fittings. For this reason, they allow the owner to claim a tax deduction that reflects this deterioration.

What Can I Claim?

There are two key components when claiming commercial property depreciation.

The first is known as Building Allowance or Capital Works. Essentially, this is the structure of the building; including concrete, roofing, tiling, windows or built-in cabinets. These works are claimed at 2.5% of their original construction cost.

The second component is Plant & Equipment. This refers to the easily removable or mechanical fixtures; such as carpet, light fittings and air conditioning. These assets are claimed at a faster rate, according to their individual effective lives.

While the laws relating to ‘previously used’ plant & equipment have changed for residential property, commercial property depreciation was left untouched.

In Depth Guides

Commercial Property Depreciation Articles:

3 Reasons Why You May Not Need a Depreciation Inspection

Did you know the laws regarding claiming depreciation have changed? Because of this, your property may not need an inspection – learn why.

Hotel Pub Depreciation Schedules – A Complete Guide

Tax depreciation is one way a business can maximise its returns. Once utilised, it becomes a tool for success, but few know how to take advantage of it. In this pub and hotel depreciation guide, you’ll learn what you need to ensure you maximise Australian tax laws. What is a Pub or Hotel Depreciation Schedule? […]

Depreciation in New Residential Buildings

Commercial Property Investment Guide

If you’re looking to invest in real estate, commercial properties present plenty of opportunities. However, it would be best to consider the risks and market drivers. This commercial property investment guide will help you. When investing in commercial real estate, you must think about more than the property investment basics. There are many complex market […]

Best Reasons to Invest in Commercial Property

You have a choice to make when investing in real estate. Commercial properties may be more difficult to manage than residential homes. However, there are plenty of reasons why you should invest in commercial property. So, you’ve decided to invest in real estate. Commercial properties may not seem like the best choice. They come with […]

Commercial and Residential Property

So how does commercial property really stack up against residential in relation to depreciation? While we have covered the differences between the two, there are also some similarities. For example, the higher the quality of the commercial property the higher the depreciation. And the taller the building in commercial property, the higher the depreciation allowance. […]

Close up of female accountant or banker making diminishing value calculations

Commercial Space Deductions

Make Sure You Claim All Depreciation on Your Commercial Real Estate If you’re thinking about buying commercial real estate in Melbourne, you need to prepare yourself. Many people fail to claim the commercial tax deductions in Australia that are due to them. This results in thousands of lost dollars. You can claim for all sorts […]