You can deduct construction costs in respect of the following capital works:
- buildings or extensions, alterations or improvements to a building
- begun in Australia after 21 August 1979 or
- begun outside Australia after 21 August 1990
- structural improvements or extensions, alterations or improvements to structural improvements begun after 26 February 1992
- environmental protection earthworks on which the expenditure was incurred after 18 August 1992.
Deductions for construction costs must be based on actual costs incurred. If it is not possible to genuinely determine the actual costs, obtain an estimate by a quantity surveyor or other independent qualified person. The costs incurred by the fund to obtain this estimate are deductible as a tax-related expense, not as an expense in gaining or producing assessable income.
Different deduction rates apply (2.5% or 4%) depending on the date on which construction began, the type of capital works, and the manner of use.
Last modified: 15 Jul 2016QC 48112