Rental properties 2004-05

Expenses deductible over a number of income years

There are three types of expenses you may incur for your rental property that may be claimed as deductions over a number of income years:

• borrowing expenses
• amounts for decline in value of depreciating assets, and
• capital works deductions.

Each of these categories is discussed in more detail in the following pages.

Sections within Expenses deductible over a number of income years

• Borrowing expenses
• Deduction for the decline in value of depreciating assets
• How do you work out your deduction?
• Effective life
• Replacements
• Immediate deduction for certain non-business depreciating assets costing $300 or less
• Low-value pooling
• What happens if you no longer hold or use a depreciating asset?
• Purchase and valuation of second-hand assets
• Working out your deductions for decline in value of depreciating assets
• Capital works deductions
• Amount of deduction
• Construction expenditure that can be claimed
• Construction expenditure that cannot be claimed
• Changes in building ownership
• Estimating construction costs
• Cost base adjustments for capital works deductions
• Cost base
• Reduced cost base
• Limited recourse debt arrangements

Last Modified: Tuesday, 2 January 2007