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Property Depreciation in Australia: Div 40 & Div 43
Depreciation is a non-cash tax deduction available to investment property owners. It allows you to claim the decline in value of the building structure (Division 43) and fixtures/fittings (Division 40) over time — reducing your taxable income without any actual cash outlay.
Division 43 — Building Allowance
You can claim 2.5% of the original construction cost per year for up to 40 years, if construction commenced after 15 September 1987. A $300,000 construction cost generates $7,500/year in Div 43 deductions.
Division 40 — Plant & Equipment
Fixtures and fittings (appliances, carpet, blinds, hot water systems etc.) depreciate at their individual ATO-set rates. A quantity surveyor's depreciation schedule identifies all claimable items and their rates.
Do I Need a Quantity Surveyor?
Yes — for most investment properties, a QS depreciation schedule ($600–$800) is essential to maximise your claim and satisfy ATO documentation requirements. The cost of the schedule is itself tax-deductible.
Estimates only. Actual depreciation depends on a formal QS schedule. Consult a registered tax agent.