Depreciation changes

Depreciation rate for buildings

The rate of depreciation for buildings with an estimated useful life of 50 years or more (as set out in Commissioner's depreciation determinations) - such as rental housing and office buildings - will reduce to 0%. This change comes into effect from the 2011-12 income year.

Buildings that were previously considered to be structures, and were purchased on or before 30 July 2009 will continue to be treated as structures for tax depreciation purposes. Any improvements to these buildings made after 30 July 2009 will not receive the grand-parented treatment.

Depreciation loading for assets

The 20% depreciation loading (a tax concession in the form of accelerated depreciation) will be removed for assets purchased after 20 May 2010. The economic rate of depreciation will apply.

Qualifying assets purchased or with binding contracts for purchase, entered into on or before 20 May 2010 can continue to use the economic rate with loading.

Date published: 06 Jul 2010

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