Claiming depreciation on buildings
This interpretation statement provides guidance to building owners on when they can claim depreciation on buildings. It considers the meaning of “building” for depreciation purposes and the distinction between residential and non-residential buildings. The statement is accompanied by a fact sheet.
Note: Please be aware that amendments contained in the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 affect this interpretation statement, in particular by:
- removing depreciation deductions for commercial and industrial buildings for the 2024–25 and later income years;
- inserting a new definition of “building” confirming that a building includes part of a building where the building is separated into unit titles; and
- repealing of the definitions of “residential building” and “non–residential building”.
Tax Information Bulletin Vol 34 No 8, September 2022
Related document
Income Tax Act 1976 – s 108
Income Tax Act 2007 – ss DA 1, DB 65, sub-part EE, ss EZ 13-15, EZ 22, EZ 23BD, YA 1 (definitions of “building”, “commercial building”, “commercial fit-out”, “dwelling”, “grandparented structure”, “independent living”, “non-residential building”, “plant”, “residential building”)
Tax Administration Act 1994 - ss 113, 113A, 91AAG
Australian Building Construction Employees’ & Builders Labourers’ Federation v Dillingham Australia Ltd (1982) 58 FLR 170
Barat v Minister of National Revenue [1991] 2, CTC 2,360
Clarke v Wilkie (1977) 17 SASR 134
Harris v De Pinna (1886) LR 33 Ch D 238
Hilderbrandt v Stephen [1964] NSWR 740
Melfort Danceland v Star City (Rural Municipality) [1977] 3 WWR 737
Mercury NZ Limited v Commissioner of Inland Revenue [2019] NZHC 1524, (2019) 29 NZTC, 24,014 (HC)
Metals & Alloys Co v Ontario Regional Assessment Commissioner (1985) 36 RPR 163
Moir v Williams [1892] 1 QB 264
Tasman Forestry Limited v CIR (1999) 19 NZTC 15,147 (CA)
R v Marks ex Australian Building Construction Employees’ and Builders Labourers’ Federation, (1981) 147 CLR 471
R v Swansea City Council ex p Elitestone Ltd (1993) 66 P & CR 422
Stevens v Gourley (1859) 7 CBNS 99
Spencer v Soljan (1984) 10 NZTPA 289