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Second-hand depreciating assets and rental properties

Last updated 20 July 2023

Second-hand depreciating assets are depreciable items previously used or installed ready for use in a rental property. Often, these assets are:

  • already existing in a property when your clients purchased it
  • used in their private residence, before renting it out.

Second-hand assets can include:

  • flooring, window coverings
  • air conditioners, washing machines, alarm systems, spas, pool pumps
  • items used for both the rental property and your client's own home.

Since 1 July 2017, your clients can’t claim the decline in value of second-hand depreciating assets, unless:

  • the property is used for carrying on a business (for example a hotel)
  • they are an excluded entity
  • the property was rented out prior to this date.

There are some exceptions when you can claim second-hand depreciating assets.

Even when a quantity surveyor prepares a depreciation schedule including second-hand assets, your clients can't claim deductions for the decline in value of these assets unless the exceptions are met.

You can find more information about the limits on deductions for decline in value of second-hand depreciating assets in our 2023 Rental properties guide.