Can you Claim Depreciation on Commercial Property?

Can you Claim Depreciation on Commercial Property?


Ever thought about investing in commercial
property? Hi, I’m Tyron Hyde, director of quantity surveying
firm Washington Brown. And in this week’s QS corner you’ll discover
the three major differences between commercial and residential depreciation. You can’t live in a residential property and
claim depreciation on it. But you CAN occupy a commercial property and
still claim deprecation. How? I bought this office space in my self-managed
super fund. Then I leased it back to Washington Brown. Not only can I claim depreciation — it
means the rent’s paid on time! The second main difference when claiming depreciation
on commercial property is the date the building allowance kicks in. Building allowance is how you depreciate structural
aspects of your property, like the bricks, concrete and roof. You can claim the building allowance on commercial
property if construction commenced after July 1982. However, for residential buildings, construction
must have started after July 1985. Some things in commercial properties also
attract a higher rate of depreciation — like this carpet. That’s because office carpet gets more wear
and tear than carpet in a home. So there you have it. The three main differences when depreciating
a commercial property are… That you can occupy the building and still
depreciate it. The building allowance kicks in at an earlier
date. And certain items have a higher rate of depreciation.
That’s all for this QS corner. I’m Tyron Hyde from Washington Brown.

One thought on “Can you Claim Depreciation on Commercial Property?

  1. Good points about the differences in commercial vs residential depreciation. One example would be claiming carpet in a commercial property, where it is expected not to last as long and claimed over a shorter period. I'd like to add that it is specific to the use of the building, as restaurants can have a completely different list of what items you can and can’t claim.

Leave a Reply

Your email address will not be published. Required fields are marked *