Expenditure incurred to acquire or construct a building
Expenditure incurred to acquire or construct a building, part of a building, or an extension, alteration or improvement to a building, is ineligible for a notional R&D deduction. However, deductions may be available under the capital works provisions in Division 43External Link of the ITAA 1997.
There is an exception for expenditure on a building that is plant, or a depreciating asset. That expenditure is specifically excluded from Division 43 of the ITAA 1997 and therefore such a building is subject to the depreciating asset rules in Division 40External Link of the ITAA 1997. Consequently, an R&D entity may be able to claim a notional deduction for the decline in value of a building that is a depreciating asset.