💼 Unlocking Tax Savings in Commercial Real Estate

Commercial property investors and tenants often overlook substantial tax deductions available through depreciation. Understanding these deductions can significantly enhance cash flow and overall investment returns.​

🧱 Division 43: Capital Works Deductions

Division 43 covers the structural elements of a building, allowing owners to claim depreciation on the construction costs over time.​Australian Property Network

Key Points:

  • Eligibility: Buildings constructed after 20 July 1982.

  • Depreciation Rate: Typically 2.5% per annum over 40 years.

  • Includes: Structural components like walls, roofs, and floors.​Commo+1propertytaxspecialists.com.au+1

Note: Even if the property was built before 1982, renovations or improvements made after this date may still be eligible for deductions.​Commo+2propertytaxspecialists.com.au+2propertytaxspecialists.com.au+2

⚙️ Division 40: Plant and Equipment Deductions

Division 40 pertains to the depreciation of removable assets and equipment within the property.​propertytaxspecialists.com.au

Key Points:

Tenants can claim deductions on assets they install during fit-outs, while owners can claim on assets they own within the property.​propertytaxspecialists.com.au+1Real Commercial+1

🏢 Benefits for Owners and Tenants

Owners:

Tenants:

  • Claim depreciation on fit-out costs and installed assets.

  • Potentially write off the remaining value of removed assets during renovations.​

📊 Real-World Example

A commercial property owner installs a new HVAC system costing $30,000. Based on the ATO’s effective life of 10 years for such systems, the owner can claim $3,000 annually as a depreciation deduction under Division 40.​

📅 Timing and Compliance

  • Schedule Preparation: It’s advisable to have a depreciation schedule prepared as soon as the property is income-producing.

  • Professional Assessment: Engage a qualified Quantity Surveyor to ensure all eligible deductions are identified.

  • ATO Compliance: Ensure that all claims align with current ATO guidelines to avoid potential issues.​tdqs.com.auCommo+1capitalclaims.com.au+1

✅ Maximise Your Deductions with TaxShield

At TaxShield, we specialise in preparing comprehensive, ATO-compliant depreciation schedules tailored for commercial properties.​

Our Services Include:

  • Detailed assessment of both Division 43 and Division 40 deductions.

  • Identification of missed deductions from previous years.

  • Guidance on claiming deductions for both owners and tenants.​

📩 Request Your Commercial Depreciation Schedule Today

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