Depreciation schedule for furniture and fixtures

Furniture and fixtures can make for great tax deductions – if your property qualifies for the deductions
Typically, to claim furniture and fixtures, you need to qualify for one of the following:

• Be renting out a brand new residential property
• Own (any type) residential property in a company name
• Own a commercial Property
• Have been renting it out (residential) continuously since June 30, 2017 or earlier

Business depreciation schedule

Commercial investment property owners can also claim the deductions on furniture and fixtures.
To do this the landlord must own the items.
I say this as often tenants supply and install a lot of furniture and fixtures to carry out a business.

But, if the landlord purchased the property with these items installed, they generally become the property of the landlord. In some cases the landlord may require the tenant to remove their own furnishings and general additions to the property.

When this happens, the landlord generally cannot claim deductions for the assets as they were entirely owned by the tenant for the duration of the rental lease agreement.

Some examples I’ve personally seen include:

• Vehicle washdown bays
• Specialised equipment (needed by tenant to operate a business)
• Signage
• Office furniture
• Office Partition walls

And much more

Effective life of furniture depreciation

Typically, furniture and fixtures fall into two categories.

• Division 40
• Division 43

Division 40 deductions for furniture and fixtures

Division 40 is the ATO ITAA category for plant and equipment items within your investment property. This schedule is where you will record plant and equipment items, their market value at the time you first offered your property for rent, and the yearly percentage of deduction.
For more info on division 40 items check out our article on it.

Division 43 deductions for furniture and fixtures

Some elements of the fixtures and furnishings are actually categorised as Division 43 items (special building works).

For example:

Air Conditioning duct work.
Although an air conditioning unit can be claimed as plant and equipment, the ductwork cannot.
Instead, it is claimed in the Special building works category.
Another item like this is Hot water heaters. The unit is a plant and equipment deduction, but the pipework is building works.

Depreciation for older furniture and fixtures

Tax deductions on furniture and fixtures can get very tricky and confusing, so it’s best to speak with your local Quantity Surveying expert to get the right advice.

Furniture Depreciation Years

When depreciating furniture, it typically has an effective life of 13.33 years. This is in accordance with the ATO ruling.
That means you can typically depreciate brand new furniture at 7.5%pa in the Prime Cost Method of depreciation, or 15%pa in the Diminishing Value Method.

Low Value Furniture

Furniture with a value equal or less than $1,000 can be claimed in the Low Value Pool category.
Here, the items depreciate at 18.75% in the first financial year, then 37.5% each year thereafter – until it has depreciated down to zero dollars

Who should you choose as your quantity surveyor?

The best quantity surveyor you can afford.

There’s 140 or more companies providing tax depreciation schedules in Australia. When Dad started the business in 1994 there were only a half dozen.
Some of the companies are fantastic value for money. Some are overpriced. And some are a total waste of your time and money.

So do your research and choose a qualified quantity surveyor who really knows investment property deductions.

Have any Questions?

Simply get in touch with me here and I’ll personally address any questions you have.

If you found this helpful, you may also find some of my other articles beneficial too. And to see some real life examples of what our clients have been receiving in tax depreciation deductions, check out our Client Portfolio page. But it’s often bes tto jsut start at the beginning and visit our tax depreciation page

This article was written by William Callaghan A.A.I.Q.S.
2nd generation Quantity Surveyor and founder of WRC Quantity Surveying

Published March 2023