Why Shopping Centre Owners Should Try on Depreciation for Size


THE FACE OF RETAIL has changed dramatically in recent years.

With the rise of online shopping, the arrival of international brands, climbing rents and challenging economic conditions … some shopping centres (and retail landlords) have started to feel the pinch as these factors affect their bottom line.

While consumer spending jumped by 0.7% during the June quarter, household savings was at a nine-year low. This could potentially lead to a decline in retail sales in future.

With these factors in mind, it’s important that retail store owners and tenants manage their money wisely.

It’s not all that hard

One of the simplest (but often overlooked) ways for shop owners and tenants to improve their cash flow is by claiming depreciation.

The Australian Taxation Office (ATO) allows commercial property owners and their tenants to claim depreciation deductions related to the wear and tear of a building and any existing plant and equipment assets contained within it.

As an owner, you are entitled to claim deductions relating to the building structure and any fixed assets and plant and equipment items they own. This can include assets such as bricks, mortar, roofs, basins and car parks.

As a tenant, on the other hand, you are able to claim depreciation on any fit out they install after commencing their lease. This can include anything from clothing racks, counters, light fittings, shelving, security systems, mannequins and fitting room chairs.

But you do require an Expert

It’s important for shopping centre owners and their tenants to contact a specialist Quantity Surveyor to discuss what deductions can be claimed.

Given that in each party can claim deductions at the same time, you should both request a depreciation schedule, so each of you is maximising the deductions you’re entitled to.

As part of the process of arranging a depreciation schedule for any commercial property – including shopping centres – a BMT specialist will perform a site inspection to uncover the structural and fixed items that can be claimed as capital works deductions.

And that’s on top of the removable plant and equipment assets contained within the property.

Renovations count as well …

You can also include any renovations that have been completed to the property, even if they were completed by a previous owner.

And if you intending to undertake any renovations or improvements in the near future, it’s also important to be aware that you may be able to claim additional deductions for them as well.

For this reason, a schedule should be completed both before and after an renovation works – so you can claim deductions for the remaining un-deducted depreciable value of any assets removed during the renovation; and also include deductions for newly installed assets.

Bottom Line: By obtaining a Tax Depreciation Schedule, you will significantly reduce their tax liability and therefore, improve you cash flow. And the fee for a tax depreciation schedule is also 100% tax deductible.


  1. Great post, thank you. 

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