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  • The type of construction and the date construction commenced

    To be eligible to claim a capital works deduction, work must have commenced after the date relevant to that type of construction in the table below.

    Deductions for capital works were introduced over time, so the date from which you can claim a deduction will depend on the type of construction.

    This table shows the rate of deduction and the period over which you can claim the deduction depending on the type of construction.

    Table: Capital works deductions for buildings and structural improvements

    Type of construction

    Construction commenced after

    Deduction rate applicable years

    Building intended to be used on completion to provide short-term accommodation to travellers in:

    • apartment buildings in which you own or lease at least 10 apartments
    • units or flats
    • hotels
    • motels
    • guest houses with at least 10 bedrooms.
     

    21/8/1979

    22/8/1979 – 21/8/1984 – 2.5%

    22/8/1984 – 15/9/1987 – 4%

    16/9/1987 – 26/2/92 – 2.5% (where the construction related to certain pre-16/9/1987 contracts, the rate is 4%)

    27/2/1992 onwards – 4%

    Building intended to be used on completion for non-residential purposes such as a shop or office.

    19/7/1982

    20/7/1982 – 21/8/1984 – 2.5%

    22/8/1984 – 15/9/1987 – 4%

    16/9/87 onwards – 2.5%

    Building intended to be used wholly or mainly for industrial activities

    26/2/1992

    27/2/1992 onwards 4%

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

    17/7/1985

    18/7/1985 – 15/9/1987 – 4%

    16/9/1987 onwards – 2.5% (where the construction related to certain pre-16/9/1987 contracts, the rate is 4%)

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

    26/2/1992

    27/2/1992 onwards – 2.5%

    Environment protection earthworks intended to be used on completion for residential purposes or to produce income.

    18/8/1992

    18/8/1992 onwards – 2.5%

    Any capital works used to produce income, even if they were not intended to be used for that purpose.

    For pre-1 July 1997 works only, the capital works must have been intended for use for specified purposes at the time of completion.

    30/6/1997

    The capital works must actually be used in a deductible way in the income year in which the deduction is claimed (see above onwards rates details for each type of construction).

    Note: 2.5% means that you can claim deductions for 40 years and 4% means for 25 years.

    You cannot claim a capital works deduction until the construction is completed.

    Although you may be able to claim a deduction for your building costs, you may not be able to claim costs such as for landscaping.

      Last modified: 08 Oct 2018QC 21620