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Scrapping Reports: Tax Depreciation Isn’t Just For New Properties

June 01, 2021

“Are you thinking about renovating your investment property? Engage a quantity surveyor first to ensure you are better off at tax time.”


Article written by Zac Gleeson at GQS.

As an owner of an income producing property you are entitled to claim for the gradual depreciation over time for your investment.

Tax Depreciation isn’t just for new properties or those built after 1985/87. Scrapping (or Write-off reporting) is an effective way of maximising your depreciation entitlements when a building is completely or partially demolished, whether it be from renovation, redevelopment or destruction.

If your asset is incoming producing and you demolish/scrap part, or all, of the structure (including the fit-out), you are entitled to claim 100% of the remaining depreciation for the part of the building that has been demolished, in the financial year demolition occurred. Please note that this may not be applicable for Division 40 assets (Plant & Equipment) if the property was purchased post 9th of May 2017. Scrapping is however still applicable to Division 43 deductions (Capital Works) which is typically the bulk of the tax deduction.

Our Process 

  • Undertake a pre-demolition Tax Deprecation Report and assess the impact of proposed works on existing structure and plant and equipment
  • Prepare a schedule of effected items with written-down values
  • Undertake a post-construction tax depreciation report on the new works to maximise entitlements

Call us at 1300 290 235 if you want to find out more.