Hi all,
I recently settled on my first IP - an old house in Pinjarra (circa 1945).
I've been doing quite a bit of research on the tax treatment of various aspects of the property - but one thing I am still stuck on is depreciation.
As I understand it, I can't depreciate the building as it was built before 1985.
I can however, depreciate plant and equipment. But I am not 100% sure how this works. It doesn't appear like I need to get a depreciation schedule completed - I can just make my own judgement.
Does this depreciation work the same as building depreciation in that it decreases the cost base of the property by the amount that you depreciate each year?
Does anyone know anywhere that has clear guidelines on this? In my research I came across the ATO's guide for rental properties in 2013, but even this was not really all that clear.
I recently settled on my first IP - an old house in Pinjarra (circa 1945).
I've been doing quite a bit of research on the tax treatment of various aspects of the property - but one thing I am still stuck on is depreciation.
As I understand it, I can't depreciate the building as it was built before 1985.
I can however, depreciate plant and equipment. But I am not 100% sure how this works. It doesn't appear like I need to get a depreciation schedule completed - I can just make my own judgement.
Does this depreciation work the same as building depreciation in that it decreases the cost base of the property by the amount that you depreciate each year?
Does anyone know anywhere that has clear guidelines on this? In my research I came across the ATO's guide for rental properties in 2013, but even this was not really all that clear.