🔨 Renovated Your Investment Property? You Could Be Sitting on Thousands in Missed Deductions

Renovations aren’t just great for attracting better tenants—they can also unlock significant tax depreciation benefits. But most property investors don’t realise that even improvements made by previous owners may be claimable.

Whether you’ve just repainted or completely overhauled your kitchen, knowing what you can and can’t claim is key to maximising your return.

📂 Claiming Renovations Under Division 40 and 43

🧱 Division 43 – Capital Works

Covers structural elements and permanent fixtures, typically claimed at 2.5% per year over 40 years.

Examples:

• New kitchens and bathrooms

• Tiling, roofing, brickwork

• Decks, pergolas, garages

• Built-in wardrobes

• Driveways or fencing

🧠 Capital works are claimable whether you completed them or a previous owner did—as long as the work was done after 15 September 1987.

🛠️ Division 40 – Plant & Equipment

Covers removable or mechanical items with a shorter lifespan and accelerated depreciation.

Examples:

• Split system air conditioners

• Ovens, cooktops, dishwashers

• Carpets and blinds

• Hot water systems

• Ceiling fans

⚠️ For second-hand residential properties purchased after 9 May 2017, existing plant & equipment assets can’t be claimed—but any new assets you install can.

💼 Investor Example: Renovations Turn Into Deductions

Investor: Brian purchased a 1980s duplex on the Gold Coast and completed a full cosmetic renovation in 2023.

Improvements included:

• Kitchen replacement: $19,000

• New bathroom and laundry: $13,000

• Split system AC units: $4,800

• Carpets and blinds throughout: $6,200

Claim breakdown:

• Division 43 (capital works): $800 p.a. over 40 years

• Division 40 (plant & equipment): $3,350 in Year 1

• Total depreciation in Year 1: $4,150

• 5-year forecast: Over $17,000 in deductions

🧾 What If You Bought a Property That Was Already Renovated?

You can still claim deductions for improvements—even if you didn’t carry out the work—provided:

• The work was done after 15 September 1987 (for Division 43)

• You have estimated construction costs from a qualified Quantity Surveyor

We regularly uncover hidden deductions for clients who bought newly renovated homes without realising those upgrades were claimable.

🛠️ What Renovations Aren’t Claimable?

• DIY labour (your own time)

• Cosmetic changes that aren’t structural (e.g. painting, styling)

• Repairs and maintenance (these are claimed differently, as immediate deductions)

📅 When to Get a Schedule?

You should order or update your depreciation schedule immediately after renovations are completed. This ensures:

• All new items are included

• Scrapped assets (like the old oven or AC unit) can be written off

• You’re ready for tax time with maximum deductions on file

✅ Don’t Miss the Hidden Value in Your Reno

A renovation may add value to your property—but it can also significantly boost your tax return. Whether it’s a recent upgrade or something completed by a previous owner, a depreciation schedule ensures you’re not overpaying tax on your investment.

📦 Ready to Claim?

Get started with our Investor Starter Package for just $395+GST.
We’ll capture all renovations and deliver a fully ATO-compliant schedule.

👉 Order My Schedule Now