Hi, In 2019 I purchased an apartment off the plan. I lived in the apartment for the first year before turning it into a rental in Jan 2021. Am I able to claim the depreciation of existing plant and equipment assets under division 40, as long as I apportion the costs for the 20/21 financial year?
Hi @NSR408 ,
Generally, you can claim the decline in value of the depreciating assets. However, because these assets are second-hand, and both purchased and first used after 2017, you won't be able to claim a deduction for them.
You can read about this on Limit on a deduction for the decline in value of second-hand depreciating assets for residential premises.
**edited 27 July to reflect correct information**
Hi @NSR408 ,
Generally, you can claim the decline in value of the depreciating assets. However, because these assets are second-hand, and both purchased and first used after 2017, you won't be able to claim a deduction for them.
You can read about this on Limit on a deduction for the decline in value of second-hand depreciating assets for residential premises.
**edited 27 July to reflect correct information**
Hi @JasonT,Thank you for your response!The Tax Depreciation Schedule I received previously, had the following advice:“The owner of the property exchanged contracts after 7.30pm 9 May 2017 or were not using the property for a taxable purpose prior to 1 July 2017. Therefore, the owner of this property is unable to claim depreciation under division 40 in relation to existing plant and equipment assets (within the property). However, the owner is able to claim any qualifying plant and equipment assets they add to the property after purchase (which are used for a taxable purpose and not second hand).�Can I please confirm that this advice is incorrect as per your response?I am still unsure whether my property is considered a 'new residential investment property' as it was purchased for personal use before becoming an investment property a year later. My understanding is that if it is not considered a new residential investment property, the above measure would apply and I am unable to claim depreciation under div 40 and can only claim as a capital loss on selling the property.Thank you again!
Hi @NSR408
Good point - thanks for picking that up for us. We've corrected our first answer to reflect this.
When you purchase an off the plan property, it becomes a sale for a new residential property at the time of settlement. This means your property would not be a new residential property.
Thanks for clarifying – I hadn't consider the initial sale at settlement when determining if my property was classified as a new residental property.Much more confident in the amended response. Thank you @BlakeATO!
21 May 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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