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  • Capital allowances – review of the effective lives of assets used in residential rental properties

    We are seeking your comments on the review of the current effective lives of assets used in residential rental properties. Comments are open until 28 September 2018.

    Effective lives are used to work out how much you can claim as a tax deduction for an asset's decline in value (depreciation deduction). For most depreciating assets, you have the choice of either:

    • working out the effective life yourself
    • using an effective life determined by the Commissioner.

    The purpose of our review is to ensure our effective life determinations are still current and to add any additional assets.

    The participation of owners of residential rental properties is critical to the success of any effective life review. The greater the level of participation, the more likely the resultant effective life determinations will be accurate and useful for owners of rental properties. The Corporate Taxpayers Association and Chartered Accountants Australia and New Zealand encourage their members to assist in this important work.

    We are issuing the effective lives of assets that are currently available to be used by rental property owners as draft effective lives. We will then determine whether the effective life of an asset will need to be changed or additional assets added. We expect that any new effective life determined to apply to assets purchased on or after 1 July 2019. We are seeking your comments on whether any of the draft effective lives should be changed or additional assets added.

    Scope of the review

    We are reviewing the effective life of assets used in rental properties and will be adding additional assets that are not currently listed.

    We expect that any new effective life determinations will apply to assets purchased on or after 1 July 2019.

    How we will conduct the review

    As part of this review, we will:

    • review the effective life of residential rental property assets that are currently listed in our schedule
    • add additional assets that are not listed in the schedule
    • consult with major interest groups, such as industry representative bodies, users and suppliers
    • complete a report with recommendations for changed or new effective lives based on an analysis of the factors listed in the effective life taxation ruling.

    See also:

    • TR 2018/4 Income tax: effective life of depreciating assets (applicable from 1 July 2018)

    Participating in the review

    Participation in the review process is entirely voluntary. However, participation from owners of assets used in residential rental properties will provide confidence to residential property owners that we will properly consider their feedback given their range of experience. In addition any new effective life determinations issued will be useful to residential property owners.

    Any information provided to us will be subject to the secrecy provisions as well as classified as commercial in confidence and will only be used for recommending effective lives to the Commissioner of Taxation.

    If you would like to participate in the review, contact John Di Francesco by:

    It will be appreciated if you provide a phone number that we can contact you about the review.

    See also:

    Residential property operators (ANZSIC code 67110)

    General assets

    Asset

    Life years

    Air conditioning assets

    See table 1

    Ceiling fans

    5

    Clocks, electric

    10

    DVD players

    5

    Door closers

    10

    Door stops, freestanding

    10

    Escalators (machinery and moving parts)

    20

    Evaporative coolers: fixed (excluding deducting and vents)

    20

    Evaporative coolers: portable

    10

    Floor coverings (removable without damage): carpet

    10

    Floor coverings (removable without damage): floating timber

    15

    Floor coverings (removable without damage): linoleum

    10

    Floor coverings (removable without damage): vinyl

    10

    Furniture, freestanding

    13 ⅓

    Garbage bins

    10

    Garbage compacting systems (excluding chutes)

    6 ⅔

    Generators

    20

    Gym assets: cardiovascular

    5

    Gym assets: resistance

    10

    Hand dryers, electrical

    10

    Heaters

    See table 2

    Hot water systems (excluding piping): electric

    12

    Hot water systems (excluding piping): gas

    12

    Hot water systems (excluding piping): solar

    15

    Intercom system assets

    10

    Lifts (including hydraulic and taction lifts)

    30

    Lights: fittings (excluding hardwired)

    5

    Lights: freestanding

    5

    Lights: shades, removable

    5

    Linen

    5

    Master antenna television (MATV) assets: amplifiers

    10

    Master antenna television (MATV) assets: master modulators

    10

    Master antenna television (MATV) assets: power sources

    10

    Mirrors, freestanding

    15

    Radios

    10

    Rugs

    7

    Solar power generating system assets

    20

    Stereo systems (incorporating amplifiers, cassette players, CD players, radios and speakers)

    7

    Surround sound systems (incorporating audio-video receivers and speakers)

    10

    Telecommunications assets: cordless phones

    4

    Telecommunications assets: Telephone hand sets

    10

    Telecommunications assets: Telephone systems

    See table B – telephony

    Television antennas, freestanding

    5

    Television sets

    10

    Vacuum cleaners

    See table 3

    Ventilation fans

    20

    Video cassette recorder systems (VCRs)

    5

    Water pumps

    20

    Window blinds, internal

    10

    Window curtains

    6

    Window shutters, automatic: controls

    10

    Window shutters, automatic: motors

    10

    Table 1

    Air conditioning assets (excluding deducting, pipes and vents):

    Asset

    Life years

    Air handling units

    20

    Chillers absorption

    25

    Chillers centrifugal

    20

    Chillers volumetrics (including reciprocating, rotary, screw, scroll) air cooled

    15

    Chillers volumetrics (including reciprocating, rotary, screw, scroll) water cooled

    20

    Condensing sets

    15

    Cooling towers

    15

    Damper motors (including variable air volume box controllers)

    10

    Fan coil units (connected to condensing sets)

    15

    Mini split systems up to 20KW (including ceiling, floor and high wall split systems)

    10

    Packaged air conditioning units

    15

    Pumps

    20

    Room units

    10

    Table 2

    Heaters:

    Asset

    Life years

    Fixed: electric

    15

    Fixed: gas: ducted central heating units

    20

    Fixed: gas other

    15

    Freestanding

    15

    Table 3

    Vacuum cleaners:

    Asset

    Life years

    Ducted: hoses

    10

    Ducted: motors

    10

    Ducted: wands

    10

    Portable

    10

    Bathroom assets

    Asset

    Life (years)

    Accessories, freestanding (including shower caddies, soap holders, toilet brushes)

    5

    Exhaust fans (including lights in heating)

    10

    Heated towel rails, electric

    10

    Shower curtains (including curtain rods and screens)

    2

    Spa bath pumps

    20

    Fire control assets

    Asset

    Life (years)

    Alarms: heat

    6

    Alarms: smoke

    6

    Detection and alarm systems: alarm bells

    12

    Detection and alarm systems: detectors (including addressable manual call points, heat, multi type and smoke)

    20

    Detection and alarm systems: fire indicator panels

    12

    Emergency warning and intercommunication systems (EWIS): master emergency control panels

     

    12

    Emergency warning and intercommunication systems (EWIS): speakers

    12

    Emergency warning and intercommunication systems (EWIS): strobe lights

    12

    Emergency warning and intercommunication systems (EWIS): warden intercom phones (WIPS)

    12

    Extinguishers

    15

    Hoses and nozzles

    10

    Pumps (including diesel and electric)

    25

    Star pressurisation assets: AC variable speed drives (VSDs)

    10

    Star pressurisation assets: pressurisation and extraction fans

    25

    Star pressurisation assets: sensors

    10

    Kitchen assets

    Asset

    Life (years)

    Cook tops

    12

    Crockery

    5

    Cutlery

    5

    Dishwashers

    10

    Freezers

    12

    Garbage disposal units

    10

    Microwave ovens

    10

    Ovens

    12

    Range hoods

    12

    Refrigerators

    12

    Stoves

    12

    Water filters, electrical

    15

    Laundry assets

    Asset

    Life (years)

    Clothes dryers

    10

    Ironing boards, freestanding

    7

    Irons

    5

    Washing machines

    10

    Outdoor assets

    Asset

    Life (years)

    Automatic garage doors: controls

    5

    Automatic garage doors: motors

    10

    Barbecue assets: fixed barbecue assets sliding trays and cookers

    10

    Barbecue assets: freestanding barbecues

    5

    Floor carpet (including artificial grass and matting)

    5

    Furniture, freestanding

    5

    Gardening watering installations: control panels

    5

    Gardening watering installations: pumps

    5

    Gardening watering installations: timing devices

    5

    Garden lights, solar

    8

    Garden sheds, freestanding

    15

    Gates, electrical: controls

    5

    Gates, electrical: motors

    15

    Operable pergola louvres: controls

    15

    Operable pergola louvres: motors

    15

    Sauna heating assets

    15

    Sewage treatment assets: controls

    8

    Sewage treatment assets: motors

    8

    Spas: fixed spa assets: chlorinators

    12

    Spas: fixed spa assets: filtration assets (including pumps)

    12

    Spas: fixed spa assets: heaters (electric or gas)

    15

    Spas: freestanding spas (incorporating blowers, controls, filters, heaters and pumps)

    17

    Swimming pool assets

    See table 4

    Tennis court assets: cleaners

    3

    Tennis court assets: drag booms

    3

    Tennis court assets: nets

    5

    Tennis court assets: rollers

    3

    Tennis court assets: umpire chairs

    15

    Table 4

    Swimming pool assets:

    Asset

    Life years

    Chlorinators

    12

    Cleaning assets

    7

    Filtration assets (including pumps)

    12

    Filtration assets (including pumps): heaters - electric

    15

    Filtration assets (including pumps): heaters - gas

    15

    Filtration assets (including pumps): heaters - solar

    20

    Security and monitoring assets

    Asset

    Life (years)

    Assess control systems:

    Assess control systems: code pads

     

    5

    Assess control systems: door controllers

    5

    Assess control systems: readers proximity

    7

    Assess control systems: swipe cards

    3

    CCTV systems: cameras

    4

    CCTV systems: monitors

    4

    CCTV systems: recorders - digital

    4

    CCTV systems: recorders - time lapse

    2

    CCTV systems: switching units (including multiplexes)

    5

    Security systems: code pads

    5

    Security systems: control panels

    5

    Security systems: detectors (including passive infrared, photo sensors and vibration)

    5

    Security systems: global system for mobiles (GSM) units

    5

    Security systems: noise makers (including bells and sirens)

    5

      Last modified: 05 Jul 2018QC 56031