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Three Commercial Property Depreciation Tips

By Bradley Beer, Chief Executive Officer of BMT Tax Depreciation

Many commercial property owners remain unaware of their depreciation entitlements.

According to Bradley Beer, the Chief Executive Officer of BMT Tax Depreciation, around 80 per cent of commercial property owners don’t claim depreciation and therefore miss out on thousands of dollars.

“Claiming depreciation is paramount for commercial property owners, as it can help to turn a property with a negative cash flow into a positive cash flow asset,” said Mr Beer.

To help commercial property owners maximise deductions, here are three depreciation tips.

1. What is Property Depreciation?

The Australian Taxation Office (ATO) requires investors to report any income earned from a commercial property as part of preparing their income tax assessment. As part of this assessment, commercial property owners are entitled to claim depreciation. Depreciation is a deduction due to the wear and tear of a buildings structure (capital works deduction) and its fixtures and fittings (plant and equipment items).

2. No Property is too old

Capital works deductions can be claimed for any commercial property in which construction commenced after the 20th of July 1982. Despite these restrictions outlined by the ATO, the owner may still be entitled to claim depreciation for recent renovations which have taken place, even those completed by a previous owner. Plant and equipment depreciation can be claimed regardless of the age of the property.

Examples include carpets, air conditioning units and light fittings.

Commercial property owners should contact a Quantity Surveyor who will conduct a site inspection to take pictures of assets and note additions which will provide evidentiary support to the owners’ claims. They will then provide a tax depreciation schedule outlining all the deductions available for the life of the property (forty years).

3. Depreciation of fit out

Both owners and tenants have the right to claim depreciation when it comes to any fit-out installed in a commercial property.

Commercial tenants can claim depreciation on any fit-out they add to a property. Examples include desks, blinds, shelving, fire fighting equipment and security systems. Commercial building owners also may be able to claim depreciation on any fit-out left behind by previous tenants once their tenancy has ceased.

If lease conditions mandate that tenants return a property to its original condition at the end of a tenancy, a Quantity Surveyor can prepare a depreciation schedule conveying the items which have been removed and the remaining depreciable value of these items can be written off as a deduction in the year of their removal by the tenant.

Commercial property owners who would like a FREE OVER THE PHONE ASSESSMENT of available deductions should contact BMT Tax Depreciation on 1300 728 726.

Article provided by BMT Tax Depreciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit for an Australia-wide service.


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