Can you depreciate commercial property?

Ever thought about investing in commercial property?

Hi, I’m Tyron Hyde, director of quantity surveying firm Washington Brown.

And in this week’s QS corner you’ll discover the three major differences between commercial and residential depreciation.

You can’t live in a residential property and claim depreciation on it.

But you CAN occupy a commercial property and still claim deprecation. How?

I bought this office space in my self-managed super fund. Then I leased it back to Washington Brown. Not only can I claim depreciation – it means the rent’s paid on time!

The second main difference when claiming depreciation on commercial property is the date the building allowance kicks in.

Building allowance is how you depreciate structural aspects of your property, like the bricks, concrete and roof.

You can claim the building allowance on commercial property if construction commenced after July 1982.

However, for residential buildings, construction must have started after July 1985.

Some things in commercial properties also attract a higher rate of depreciation – like this carpet.

That’s because office carpet gets more wear and tear than carpet in a home.

So there you have it.

The three main differences when depreciating a commercial property are…

  1. That you can occupy the building and still depreciate it.
  2. The building allowance kicks in at an earlier date.
  3. And certain items have a higher rate of depreciation.

That’s all for this QS corner. I’m Tyron Hyde from Washington Brown.

To watch more videos – see my full list of QS Corner tips.

Work out how much you save using our free property depreciation calculator or make it happen and get an obligation free quote for a depreciation schedule now.

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