Capital works deductions

You can claim a deduction for the construction costs of buildings and other capital works – such as structural improvements – that are used for producing income.

The deduction is available for the following capital works:

  • buildings or extensions, alterations or improvements to a building
  • structural improvements such as sealed driveways, fences and retaining walls
  • earthworks for environmental protection, such as embankments.

If it is not possible to determine the actual construction costs, you can obtain an estimate from a quantity surveyor or other independent qualified person. You can claim a deduction for the cost of the estimate.

Different deduction rates apply (2.5% or 4.0%) depending on the date on which construction began, the type of capital works, and how it's used.

See also:

Last modified: 13 Mar 2015QC 44449