On 21 December 2019, Taylor acquired a one bedroom apartment in Pyrmont for$760000. She immediately rented this property out to tenants at $650 per week.
Based on a quantity surveyor's report, she is advised that the apartment was built by Safety Builders in August 2016. The original construction cost of her one bedroom apartment was$400. What deduction can Taylor claim under Division 43?

Question

Quizplus · Accepted Answer

Taylor can claim a capital works deduction under Division 43 for the construction cost of the apartment. The deduction rate is 2.5% per annum for 40 years. Since the apartment was built in August 2016, by December 2019, 3.33 years have passed. The deduction for 2019 would be 2.5% of $400,000, which is $10,000 per year. For 3.33 years, it would be approximately $5,246.

On 21 December 2019, Taylor Acquired a One Bedroom Apartment