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Your commercial fit-out within a building is depreciable. This is the case regardless of the depreciation rate of the building itself.

Commercial fit-out means an item that is:

  • plant attached to a commercial building not used inside a dwelling within the commercial building
  • non-structural and not used to water-proof the building, is attached to a building and is:
    • not used in relation to, and is not part of, a dwelling within the building, or
    • used in relation to, but is not part of a dwelling within the building, and the building is a commercial building.

Depreciation and shared fit-out items

Where you change a building's main use, the normal depreciation change-of-use rules apply to the items of shared fit-out.

If you change the main purpose of a building from:

  • commercial to residential, you treat shared fit-out items as having been sold at their market value
  • residential to commercial, you treat shared fit-out items as having been purchased at their market value.

With items of shared fit-out, you apply the normal depreciation recovery or loss-on-disposal rules.

The change of use is treated as occurring on the first day of the next income year.