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Depreciation Calculator - Div 43 + Div 40
A realistic first estimate of what a rental property can claim - with the rule most calculators miss: second-hand plant hasn't been deductible since 2017, so established and new builds are worlds apart.
The property
Estimated year-one deduction
$6,563/yr
- Division 43 capital works (2.5%/yr of est. construction cost)
- $6,563
- Division 40 plant & equipment - excluded on established
- $0
- Estimated total over 10 years
- $65,625
Get a QS schedule before claiming. This is a deal-analysis estimate from config percentages - a quantity surveyor schedule ($600-$800, itself deductible) is the ATO-accepted basis and usually finds more. Whether the deduction reaches your salary depends on your acquisition class.
Depreciation only matters through its effect on after-tax cash flow. The full audit shows that effect year by year.
Deal Auditor - in build, not yet available
The paper deduction that moved the market
Depreciation is the only rental deduction that doesn't cost cash. The structure claims 2.5% of its construction cost annually for forty years (built after 15 September 1987); the fittings - Division 40 plant - decline faster but, since 2017, only for buyers of new property. That exclusion, plus the May 2026 reform exempting new builds from loss quarantining, means depreciation is now doubly loaded toward new stock: bigger deductions, and deductions that actually offset salary. On an established post-reform purchase, the same paper loss mostly deepens a quarantined pool.
Remember the CGT echo: Division 43 claims come off your cost base at sale - model both ends with the CGT calculator, or the whole sequence in the Deal Auditor.
Frequently asked questions
What can I depreciate on a rental property?
Two things. Division 43 capital works - the building structure - at 2.5% a year of construction cost for buildings constructed after 15 September 1987, for up to 40 years from construction. And Division 40 plant and equipment - appliances, carpets, blinds and the like - but since the 2017 changes, only if you bought the property new. Second-hand plant in an established purchase is not deductible.
Why do new builds get so much more depreciation?
Three compounding reasons: the construction cost is a larger share of the price and fully fresh (maximum Div 43), the plant and equipment is new so Division 40 applies, and - since the May 2026 reform - the deductions are actually usable against your salary because new builds keep full negative gearing. On an established post-reform purchase, depreciation only deepens a quarantined loss pool.
Do I need a quantity surveyor schedule?
Yes, for claiming - the ATO accepts a QS-prepared schedule as the basis for your deductions, and a one-off fee of $600-$800 typically pays for itself many times over. This calculator is an estimate for deal analysis, not a substitute for the schedule.
Does claiming depreciation affect capital gains tax?
Division 43 claims reduce your cost base, which increases the capital gain at sale. It is generally still worthwhile - a full deduction each year versus a discounted, indexed or deferred cost later - but factor it in. Our CGT calculator has a field for exactly this.