ato

 
 
Show download pdf controls
Show print controls

  • Amount of deduction

    Attention

    Warning:

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

    End of attention

    The amount of the deduction you can claim depends on the type of construction and the date construction started.

    Table 1 shows you the types of rental property construction that qualify. If the type of construction you own (or own jointly) does not appear next to the relevant 'date construction started' in the table, no deduction can be claimed. If the type of construction qualifies, Table 2 shows the rate of deduction available.

    Table 1

    Date construction started

    Type of construction for which deduction can be claimed

    Before 22 August 1979

    None

    22 August 1979 to 19 July 1982

    Certain buildings (Note 1) intended to be used on completion to provide short term accommodation to travellers (Note 2)

    20 July 1982 to 17 July 1985

    Certain buildings (Note 1) intended to be used on completion to provide short term accommodation to travellers (Note 2)

    Building intended to be used on completion for non-residential purposes (eg a shop or office)

    18 July 1985 to 26 February 1992

    Any building intended to be used on completion for residential purposes or to produce income

    27 February 1992 to 18 August 1992

    Certain buildings (Note 1) intended to be used on completion to provide short term accommodation to travellers (Note 2)

    Any other building intended to be used on completion for residential purposes or to produce income

    Structural improvements intended to be used on completion for residential purposes or to produce income

    19 August 1992 to 30 June 1997

    Certain buildings (Note 1) intended to be used on completion to provide short term accommodation to travellers (Note 2)

    Any other building intended to be used on completion for residential purposes or to produce income

    Structural improvements intended to be used on completion for residential purposes or to produce income

    Environment protection earthworks (Note 2) intended to be used on completion for residential purposes or to produce income

    After 30 June 1997

    Any capital works used to produce income (even if, on completion, it was not intended that they be used for that purpose).

    Note 1: 'Certain buildings' are apartment buildings consisting of at least 10 apartments, units or flats you owned or leased; or a hotel, motel or guest house that has at least 10 bedrooms

    Note 2: For more information, contact the ATO on 13 24 78.

    Table 2

    Date construction started

    Rate of deduction per income year

    Before 22 August 1979

    nil

    22 August 1979 to 21 August 1984

    2.5%

    22 August 1984 to 15 September 1987

    4%

    After 15 September 1987

    2.5%

    Note: Where construction of a building to provide short-term accommodation for travellers commenced after 26 February 1992, the rate of deduction was increased to 4%.

    With regard to an apartment building, the 4% rate only applies to apartments, units or flats if you own or lease 10 or more of them in the building.

    The deduction can be claimed for 25 years from the date construction was completed in the case of a 4% deduction, and for 40 years from the date construction was completed in the case of a 2.5% deduction. If the construction was completed part of the way through the income year, you can claim a pro-rata deduction for that part.

    Last modified: 04 Dec 2005QC 27452