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  • Capital works deductions

    Capital works used to produce income, including buildings and structural improvements, are written off over a longer period than other depreciating assets.

    Note that the land itself can't be written off and its cost isn't deductible.

    The capital works deduction is available for:

    • buildings or extensions, alterations or improvements to a building
    • structural improvements such as sealed driveways, fences and retaining walls
    • earthworks for environmental protection, such as embankments.

    If it isn't possible to determine the actual construction costs, you can get an estimate from a quantity surveyor or other independent qualified person. You can claim a deduction for the full cost of the estimate in the year it is incurred. Deduction rates of 2.5% or 4.0% apply, depending on the date on which construction began, the type of capital works, and how they're used.

    Special rules apply to:

    See also:

    Last modified: 24 Apr 2018QC 45988