Special Cases & Unique Scenarios – Koste Chartered Quantity Surveyors

1. Can I Claim Tax Depreciation on Renovations I Didn’t Complete?

Short Answer:

Yes! If a previous owner completed renovations, you may still be eligible to claim depreciation on those improvements.

How It Works:

✔ If renovations were done after 16 September 1987, Division 43 (Capital Works) deductions can be claimed.
✔ Even if you didn’t pay for the upgrades, you can still claim the remaining depreciation.
✔ Koste’s Chartered Quantity Surveyors assess past renovations and improvements to ensure maximum claims.

📌 Find Out If You Can Claim Past Renovations: Request an Assessment

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2. What Happens If a Tenant Leaves a Fit-Out Behind? (Tenant Abandonment)

Short Answer:

If a tenant leaves behind a fit-out or assets, landlords may be able to claim a tax deduction for the remaining written-down value of those items.

What Landlords Need to Know:

✔ Division 40 (Plant & Equipment) may be written off if legally owned by the landlord.
✔ Division 43 (Capital Works) can continue to be claimed if part of the building structure.
✔ If the landlord takes ownership of the abandoned assets, they may be reclassified for depreciation.

📌 Need a Tenant Abandonment Report? Speak to a Specialist

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3. How Do Leasehold Improvements Affect Tax Depreciation?

Short Answer:

Leasehold improvements (fit-outs, refurbishments, modifications) can be claimed by either the landlord or the tenant, depending on the lease agreement.

Key Depreciation Rules for Leasehold Improvements:

✅ If the tenant pays for improvements, they claim depreciation on assets and structural upgrades.
✅ If the landlord contributes, depreciation eligibility depends on ownership structure.
✅ At lease end, abandoned assets may be claimed as a tax deduction.

📌 Get a Leasehold Depreciation Report: Request a Quote

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4. Can I Claim Depreciation If My Property Was Destroyed or Demolished?

Short Answer:

Yes! If a property is demolished or destroyed, you may be eligible to claim a scrapping deduction for the remaining depreciation value.

How to Claim Depreciation on a Demolished Property:

✔ Write off the remaining Division 43 deductions for structural components.
✔ Claim residual value of removed Division 40 assets (if applicable).
✔ Koste can prepare an asset write-off report before demolition to ensure maximum deductions.

📌 Get a Scrapping Report Before Demolition: Speak to an Expert

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5. What Happens If I Sell My Property? (Capital Gains Tax & Depreciation)

Short Answer:

When selling, depreciation may impact your Capital Gains Tax (CGT) by reducing the cost base of the property.

Key CGT Considerations:

✔ Depreciation claimed on Division 43 (Capital Works) reduces the cost base, increasing CGT exposure.
✔ Division 40 (Plant & Equipment) deductions do not affect CGT calculations.
✔ Strategic tax planning can help balance depreciation benefits with future CGT.

📌 Book a CGT & Depreciation Strategy Consultation: Talk to an Expert

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6. What If I Gift or Transfer a Property Instead of Selling?

Short Answer:

Depreciation rules still apply, but tax treatment depends on whether it’s a family transfer, estate settlement, or business restructuring.

Key Tax Considerations for Property Transfers:

✔ Depreciation may continue for the new owner if the property remains income-producing.
✔ Transfers between family members may trigger CGT, even if no money is exchanged.
✔ ATO rules for market value substitution may apply.

📌 Get Expert Guidance on Depreciation & Property Transfers: Speak to Koste

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7. Can I Self-Assess the Effective Life of My Assets for Depreciation?

Short Answer:

Yes, but it must be justifiable to the ATO. If an asset’s actual usage suggests a shorter lifespan than the ATO’s guidelines, self-assessing can increase deductions.

Key Rules for Self-Assessing Asset Life:

✅ Tenants who refit their store after a set period may justify a shorter asset lifespan.
✅ Certain industries (hospitality, retail) may have high-wear assets needing faster depreciation.
✅ A Chartered Quantity Surveyor can provide supporting evidence for self-assessed depreciation.

📌 Find Out If Self-Assessing Asset Life is Right for You: Get Expert Advice