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Construction Costs & Accounting For Tax Depreciation

As a building gets older and older, parts of it will naturally wear out and depreciate in value. This depreciation can be claimed as a deduction when it comes to tax time, so you pay less tax on your investment property. Accounting for tax depreciation during construction and when new assets are installed is an important part of making sure you get the deductions (and thus the refund) that you deserve.

The construction stage

You can claim the cost of construction as a deduction as well. This is known as ‘capital works deductions’, and includes all the costs of building your investment property in the first place. This deduction is available scaled over 40 years according to ATO rules (that’s how long they say a building lasts before it needs replacing). For example, a new building which costs $350,000 to build would get you an $8,750 tax deduction per year. However, to claim this properly, you’ll need to have a thorough account of construction costs for tax depreciation purposes – something our highly qualified quantity surveyors will be more than happy to help with. We can get involved at any stage of the building process – the earlier the better – so that once your investment property is finished, you’ve got a full account of construction costs which meets Tax Office requirements in terms of detail and comprehensiveness.

Get started

Got any questions about construction costs and depreciation? We’re happy to help. Just give us a call on 1300 884 215 to see how we can help.