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  • 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 partly own) 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 intended to be used on completion to provide short-term accommodation to travellers (see note)

    20 July 1982 to
    17 July 1985

    Certain buildings intended to be used on completion to provide short-term accommodation to travellers (see note)

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

    18 July 1985 to
    26 February 1992

    Any building intended to be used to produce income on completion

    27 February 1992 to
    18 August 1992

    Any building intended to be used to produce income on completion

    Structural improvements intended to be used to produce income on completion

    19 August 1992 to
    30 June 1997

    Any building intended to be used to produce income on completion

    Structural improvements intended to be used to produce income on completion

    Environment protection earthworks (see note) intended to be used to produce income on completion

    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).

    For more information, contact our Personal Tax Infoline on 13 28 61.

    Note: An error in table 1 was identified and corrected in August 2002. The above headings are correct.

    Table 2

    Date construction started

    Rate of deduction per income year

    Before 19 August 1979

    nil

    19 August 1979 to 21 August 1984

    2.5%

    22 August 1984 to 15 September 1987

    4%

    After 15 September 1987

    2.5%

    Note: For buildings used to provide short-term accommodation for travellers that commenced construction after 26 February 1992, the rate of deduction was again increased to 4%.

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

    Examples of structural improvements include sealed driveways, retaining walls and fences.

    Last modified: 11 Dec 2019QC 16578