owner of commercial property learning about deprecation

What deductions can a commercial property owner claim for depreciation?

Capital allowance and depreciation can be substantial tax deductions for commercial property owners and tenants.

Unfortunately, a large portion of business owners are not maximising their tax deductions by claiming the maximum deductions available for capital allowance and depreciation of their building and business assets.  This means an unnecessary cash flow loss for the business.

So when it comes to the building, the fit-out and the assets, who can claim depreciation for what?

The Commercial Building Owner

The property owner is entitled to claim depreciation for Division 43 works (capital works) that they have paid for.  This includes the building, and structural/built additions, and includes newly built or upgraded bathrooms, kitchens, outdoor areas etc.  

Also claimable are any Division 40 assets they have paid for and included as part of the tenancy agreement. 

Find more detailed information about Commercial Building Depreciation for owners here.

The tenant

Tenants are more likely to be claiming depreciation for the building fit-out (if they paid for it), as well as machinery, furniture and electrical assets.

For example, a cafe/restaurant business owner is likely to be claiming depreciation for the internal fit-out, fridges, bar and counter, tables, chairs, styling assets etc.

An office based or medical business will likely be claiming for partition walls, flooring, window dressings, reception counters, furniture, lunchroom fit-out, styling assets etc.

How to maximise your deductions for depreciation

In order to effectively maximise the capital works and depreciation deductions available to both commercial landlords and tenants it is essential to engage the services of a professional quantity surveyor to process both the known and unknown costs. 

A specialist quantity surveyor will dissect the historical construction costs, including building improvements and additions and estimate costs where information is not available.

A quantity surveyor will also review the contract of sale and tenancy contracts to ensure building works and assets are accurately allocated between entities. 

More than 20 years experience, expert applied knowledge, optimal results

Assessment of commercial buildings for capital allowances and depreciation is best managed by an expert. Our commercial division is led by Director Mark Wilkins.  Mark has been involved in the construction industry for over 20 years and has specialised in the niche area of commercial building depreciation since 1999.

Our professional team has extensive experience assessing all types of commercial properties from small industrial units to golf courses, aged care facilities, restaurants, retail manufacturing and rural properties.  In recent years we have developed niche skills in assessing and reporting in the hospitality, child care and dental/medical industries. 

Free expert consultation

To discuss how depreciation can benefit you as a commercial property owner or lessee, get in touch with our expert team today for a free consultation – email Alex our Senior Tax Depreciation Specialist at alexk@capitalclaims.com.au or call us on 1300 922 220.  

Download as a PDF

Related articles:

Refurbishing business spaces

Medical and dental practice owners are missing out on claiming depreciation

The tax benefits hidden in your business fit-out

Buying a pub? Use this tip to ensure a cash flow advantage up-front… 


Get a Free Quote for a Depreciation Schedule.

We’ll include an estimate of your potential deductions, and if we can’t guarantee a strong result, we’ll let you know up front and there will be no cost to you.

Leave a Reply