Deductions to Get Your Motor Running


COMMERCIAL PROPERTY owners often require vehicles for use in the day-to-day operation of their business. And like other assets contained within a commercial property, vehicles can be depreciated and claimed as a deductible expense.

The Australian Taxation Office (ATO) lists most deductions available for motor vehicles under Table B of the 2014/4 Tax Ruling.

The deductions which can be claimed by commercial property owners will vary significantly, as the ATO provides an individual effective life for different vehicle categories dependent on the vehicles size and use.

Generally, cars have an effective life of eight years.

However, if a car is used as a taxi, the effective life is reduced significantly to just four years. The same applies to hire vehicles and travellers cars, which have an effective life of just five years.

The ATO also provides individual effective lives for buses, minibuses, light commercial vehicles, trailers, trucks, motor cycles and scooters.

To find the effective life and the depreciation rate using either the diminishing value or prime cost methods of depreciation for a vehicle, see the table below:


Exceptions which do not fall within Table B assets are vehicles used in mining and garbage compactor trucks which fall under category headings for these industries in Table A of the 2014/4 Tax Ruling.

Additional Concessions

It’s important to note that there are also additional concessions which apply for small business owners. The ATO allows small business owners to an instant asset write-off for items which cost less than $1,000.

This ruling extends to vehicles. Small business owners who purchased a motor vehicle between the 1st of July 2012 and the 31st of December 2013 are also entitled to claim up to $5,000 as an immediate deduction for a motor vehicle which cost $6,500 or more that it started to use or had installed ready for use during these dates.

Bottom Line: It’s always best to consult with specialist Quantity Surveyor to discuss the deductions available for any depreciable asset used within a commercial property.

These deductions for vehicles can be included with other depreciable assets within a depreciation schedule.