How one year can make all the difference


Expert Advice: by Tyron Hyde

I used to advise investors to buy property built in 1986.


Because residential properties built between July 18 1985 and September 15 1987 used to attract a 4% building depreciation rate over a 25-year life span.

Everything built since then attracts a 2.5% rate over a 40-year life span.

So the net result of purchasing properties in this odd two year period was increased tax deductions – and therefore cash flow – at a faster rate.

But as of September this year, the loophole effectively closed.

That means any properties built before September 1987 incur NO building allowance.

However, if you buy a property where construction commenced in 1988, you still have 16 years to depreciate the building.

That's over 40% of the original construction cost left for you to claim – I know which one I prefer!

So if you’re in the market for an investment property - it’s worth knowing the date that construction commenced – especially if it’s around the mid to late 80s. It could make quite a difference.

The Australian Taxation Office has identified Quantity Surveyors as appropriately qualified to determine the original construction cost, where the costs are unknown.

Tyron Hyde is a director of quantity surveying firm Washington Brown. For more QS Corner tips and information on property depreciation including a FREE online tax depreciation calculator, visit

To read more Expert Advice articles by Tyron Click Here

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.


With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : glendenning , artarmon , homebush , west wodonga , windale

go back