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Depreciation – plant and buildings

The rate of depreciation of a depreciating asset (plant) generally depends upon the date of acquisition, whether the taxpayer is a small business entity and the asset’s effective life (self-assessed or as determined by the Commissioner).

Years in effective life Prime cost (%) Diminishing value (%)*
2 50 100
3 33.3 66.67
4 25 50
5 20 40
10 10 20
15 6.67 13.33
20 5 10
30 3.3 6.67
40 2.5 5

* Diminishing value rates specified are applicable generally to assets first held on or after 10 May 2006.

Eligible small businesses – those that carry on business and have aggregated turnover of less than $10 million (for the 2018-19 income year) – can choose to apply simplified capital allowances rules, including pooling of depreciating assets and an immediate deduction for a depreciating asset that has a cost that does not exceed $20,000 for assets first acquired on or after 7.30pm, by legal time in the Australian Capital Territory, on 12 May 2015, and first used or installed ready for use before 30 June 2019 (under proposed law yet to be enacted to extend the period beyond 30 June 2018).

The construction cost of income producing buildings and structural improvements may be written off at the following rates where construction commenced on or after 27 February 1992^.

Qualifying buildings and structural improvements Annual deduction (%)
Short-term traveller accommodation 4.0
Industrial buildings 4.0
Other income producing buildings 2.5
Structural improvements 2.5

^ Where construction commenced prior to 27 February 1992, qualifying buildings may be written off at either 2.5% or 4% pa, depending on the date on which construction commenced.

  • Motor vehicle depreciation cost limit for 2018-19 – $57,581

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