5 Tips to Maximise Your Tax Benefits With Commercial Property

TAX TIME FOR COMMERCIAL property investors can often be complex with many factors to consider, including property depreciation. 

To help you get the most out of your commercial property, here are 5 tax tips on depreciation from BMT Tax Depreciation.

Tip 1: Both capital works and plant and equipment depreciation deductions are available 

Commercial property can be claimed under two different divisions: 

Capital works deductions (Division 43) are claimed on the building’s structure and the assets that are permanently fixed to the property.

Plant and equipment depreciation (Division 40) is claimed on assets that are easily removable from the property or are mechanical in nature. 

Tip 2: Property owners and tenants can claim depreciation, and so can owner-occupiers 

Whether you’re a commercial property owner/landlord or a tenant/leaseholder you can claim depreciation deductions.

For property owners, depreciation can be claimed if your property is leased or genuinely available for rent.

Unlike residential property where depreciation cannot be claimed by owner-occupiers, commercial businesses that both own and occupy the commercial property can claim depreciation.

Tip 3: Age doesn’t matter 

Your property can be old or new and still be eligible for depreciation deductions. Eligible plant and equipment deductions can be claimed, regardless of age. Capital works depreciation can be claimed on properties where construction commenced after 20 July 1982.

There may be deductions available on a property built prior to this date, so it always pays to ask. 

When purchasing a commercial property, it’s worthwhile checking if any previous depreciation has been claimed on the property. If not, you may be eligible to claim retrospectively.

Tip 4: Maximise incentives 

If you’re a commercial property owner or tenant that runs a business with an aggregated turnover of up to $5 billion, you’re eligible to claim temporary full expensing where applicable.

This government incentive allows businesses that purchase plant and equipment assets from 6 October 2020 to 1 July 2023 to instantly write off the asset’s cost.

There are also other government incentives that accelerate depreciation deductions including the backing business incentive and the instant asset write-off. 

Tip 5: Previous years’ tax returns can be adjusted

If you haven’t been maximising your deductions and claiming depreciation, the previous two financial years’ tax returns can be amended. A tax depreciation schedule can provide the details of any deductions missed for your accountant to make a claim.

Bottom Line: To ensure the correct deductions are claimed, speak with a specialist quantity surveyor.

These experts are recognised under Tax Ruling 97/25 as one of the few professionals with the appropriate qualifications necessary to estimate construction costs for depreciation purposes. These Tax Schedules make the process easy and enable you to claim the maximum deductions possible. 


  1. Vance Marcollo says

    I don’t hear enough complaining about the non-linear land tax.
    It’s offensive social, communist style social engineering.
    Property is too visible and the government can see it too easily.
    Sometimes I wish I had invested in yachts, then I could sail
    over the horizon and government couldn’t see me.

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