• Deduction for decline in value of depreciating assets

    You can claim a deduction for the decline in value of certain items, known as depreciating assets, that you acquired as part of the purchase of your property or that you subsequently purchased for your property.

    What is a depreciating asset?

    A depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used. Examples of depreciating assets are freestanding furniture, stoves, washing machines and television sets.

    Our publication Rental properties has a comprehensive list of depreciating assets found in residential rental properties.

    The publications Guide to depreciating assets and Rental properties will help you understand the rules for working out your deduction for decline in value and other aspects of rental property ownership. Guide to depreciating assets contains details of the immediate deduction for assets whose cost (when added to the cost of other substantially identical assets or assets that make up a set) does not exceed $300. It also explains the low-value pool, to which you can allocate depreciating assets:

    • costing less than $1,000 (low-cost assets)
    • written down to less than $1,000 under the diminishing value method (low-value assets).

    If you choose the low-value pool method to calculate the decline in value of low-cost and low-value assets, read Low-value pool deduction.

    Proposed legislative changes will limit depreciation deductions for plant and equipment for a rental property. If passed, these changes may affect your 2017–18 income tax return.

      Last modified: 18 Aug 2017QC 16824