Show download pdf controls
  • Capitals works deduction (special building write-off)



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    You can deduct certain kinds of construction expenditure. In the case of residential rental properties, the deductions would generally be spread over a period of 25 or 40 years. These are referred to as capital works deductions (special building write-off deductions). The deduction is limited to 100 per cent of the construction expenditure.

    Deductions based on construction expenditure apply to capital works such as a building or an extension-for example, adding a room or garage; alterations-such as removing or adding an internal wall; or improvement to a building-for example, erecting a pergola, patio or carport. Deductions are allowable only for the period the property is rented or is available for rent.

    Where you are entitled to capital works deductions (special building write-off deductions), the construction expenditure on which those deductions are based cannot be taken into account in working out any other types of deductions to be claimed, such as depreciation.

    Last modified: 28 Jul 2003QC 16187