Division 40 plant and equipment depreciation
An Australian tax deduction for the decline in value of removable plant and equipment in an income-producing property, claimable over the effective life of each asset.
Division 40 of the Income Tax Assessment Act 1997 lets owners of income-producing property depreciate removable plant and equipment — carpets, blinds, ovens, dishwashers, air-conditioning units and the like — over the effective life set by the ATO or self-assessed.
Since 9 May 2017, residential rental property owners can generally only claim Division 40 deductions on plant and equipment they purchased new, not on second-hand items that came with the property. The rule was introduced to prevent multiple investors claiming depreciation on the same asset as it passed between owners.
Division 40 deductions reduce each asset’s adjustable value but do not directly adjust the building cost base for CGT, unlike Division 43 capital works.
Primary source
Australian Taxation Office (ATO) — Depreciation and capital allowances →Last reviewed 15 April 2026. Rates, thresholds, and deadlines change — always verify against the primary source before making decisions.