One issue that causes confusion for property investors (and their accountants) when lodging an annual tax return, is what items can be considered a depreciating asset?
The Australian Tax Office has produced a list of over 230 items likely to be found in residential rental properties, and identified them as both depreciating assets and eligible for a decline in value deduction, or as assets eligible for a capital works deduction.
Depreciating assets commonly found in residential rental properties include:
-air conditioning units (excluding ducts, pipes and vents);
-lights, both fitted and freestanding, and including shades;
-removable floor coverings, rugs;
-garbage bins and compactors;
-window curtains and blinds;
-electronic security assets, intercoms;
-heaters, ceiling fans;
-hot water systems (including solar hot water heaters);
-refrigerators, freezers, stoves, cook tops and range hoods;
-swimming pool filtration and cleaning systems;
-television sets, dvd players;
-washing machines, dryers.
You can find the full list in the Tax Office’s Rental Properties 2004-05 booklet, specifically at http://www.ato.gov.au/individuals/content.asp?doc=/content/57273.htm