Why It Matters

Commercial warehouses pack hidden depreciation value.

Whilst warehouses typically have a lower construction cost per square metre than other commercial property types, the scale of the building and the value of associated plant and equipment often combine to deliver substantial annual deductions for the owner.

A specialist quantity surveyor identifies items that are easily missed: high bay lighting, dock levellers, automatic door motors, fire booster pumps, ventilation systems, plus any office fit-out. For logistics warehouses, owner-supplied racking and refrigeration plant can add tens of thousands more.

MCG has prepared depreciation schedules for warehouses ranging from small strata-titled units through to major transport and manufacturing hubs with construction values into the tens of millions.

Typical Deduction Split
Division 40 vs Division 43 in a warehouse

For a representative commercial warehouse, the depreciation split looks like this:

82% Division 43
(Building structure)
18% Division 40
(Plant & equipment)

The Division 40 share rises in warehouses with significant fit-out, refrigeration, automation, or owner-supplied racking.

Build Cost Reference

Warehouse construction cost per m² in Australia

Indicative 2026 commercial warehouse build cost ranges for Australian properties, used by MCG when preparing depreciation schedules for newly built or recently constructed warehouses. Actual costs vary by location, specification, and current market conditions.

Commercial warehouse build cost per square metre · Australia · 2026 indicative ranges
Warehouse type Build cost per m² (AUD) Typical inclusions
Smaller warehouse, no office$500 – $950Basic shell, concrete slab, single-bay roller door, minimal fit-out
Larger warehouse / office included$900 – $1,500Office space, amenities, multiple roller doors, modern fit-out, basic services
Distribution centre / logistics hub$1,200 – $1,800Multi-bay, dock levellers, racking, security, automation, large office component
Cold storage / refrigerated warehouse$1,400 – $2,200Insulated panels, refrigeration plant, controlled atmosphere systems

Need a tailored construction cost estimate rather than depreciation? See MCG construction cost estimating.

Why Use MCG

What you get from a specialist warehouse QS

Six things a generic accountant or self-prepared estimate cannot match.

Site inspection by a registered QS
Every warehouse is physically inspected by a registered tax agent quantity surveyor. No estimating from photos, no missed assets.
High-value plant identified
Dock levellers, high bay lighting, fire booster pumps, refrigeration, ventilation, racking, security - all identified and individually valued.
40-year compliant schedule
Full ATO-compliant 40-year report showing both Prime Cost and Diminishing Value methods, year-by-year, for every asset.
Office fit-out captured
Carpet, blinds, air conditioning, partition walls, access control - the office portion of your warehouse adds materially to deductions.
2 to 3 week turnaround
From site inspection to delivered report. Urgent turnarounds are available where settlement timing requires it.
Registered tax agent
MCG is a Tax Practitioners Board registered tax agent firm, not just a quantity surveyor. The schedule itself is tax deductible.
What's Depreciable

Depreciable assets typical to a commercial warehouse

Two broad asset groups: the warehouse itself, and any office or amenity fit-out. Both contribute to the overall deduction.

Warehouse Body

Plant & equipment in the warehouse

High-value items often missed by a generic schedule

  • High bay lighting10 to 15 year effective life. Significant value across a large floor plate.
  • Dock levellers and dock equipmentSpecialist hydraulic and mechanical assets, individually significant.
  • Automatic roller door motorsEach motor is a separate depreciable asset. Most warehouses have several.
  • Fire systemsFire extinguishers, hose reels, fire booster pumps, sprinkler control equipment.
  • Ventilation and exhaust systemsRidge vents, exhaust fans, air movement systems.
  • Owner-supplied rackingWhere racking is owned by the property holder, it's depreciable plant. Very high value in logistics warehouses.
  • Refrigeration plantCold storage warehouses: chillers, evaporators, controlled atmosphere systems. Often the highest single asset class.
Office & Amenities

Plant & equipment in the office portion

Office fit-out adds 15 to 25% on top in many warehouses

  • Carpet8 year effective life. Higher diminishing value rate than the building.
  • Window blinds10 year effective life across the office windows.
  • Air conditioning systemsMini split systems, ducted units, packaged units. Significant value if zoned.
  • Door control / access systemsCard readers, intercoms, electronic locks, swipe systems.
  • Security systemsCCTV cameras, monitors, recorders, alarm panels.
  • Bathroom & kitchen fit-outHot water systems, hand dryers, exhaust fans, white goods, freestanding bathroom accessories.
  • Door closers and ironmongeryOften overlooked, individually small but cumulatively material.
How It Works

From enquiry to lodged schedule in 4 steps

A standard MCG warehouse depreciation engagement, end to end.

Send property details
Address, settlement date, purchase price, plus any construction or fit-out cost documentation you have on hand.
QS site inspection
A registered QS attends the warehouse, photographs and measures every depreciable asset, and notes condition, age, and effective life.
Schedule prepared
MCG prepares your 40-year compliant report. Both Prime Cost and Diminishing Value methods shown, year by year, asset by asset.
Lodge with your tax return
Hand the schedule to your accountant or use it for your self-prepared return. The schedule is itself tax deductible.
Mike Mortlock, Co-Founder and Managing Director of MCG Quantity Surveyors
Reviewed by

Mike Mortlock

Co-Founder and Managing Director, MCG Quantity Surveyors

Mike Mortlock is a registered tax agent and the co-founder of MCG Quantity Surveyors. He sits on the AIQS Advisory Board and the PIPA Board, and is a regular commercial property depreciation commentator in the Australian Financial Review. MCG has prepared depreciation schedules for warehouse properties ranging from small strata-titled units through to major transport and manufacturing hubs.

Registered Tax Agent (TPB) AIQS Advisory Board PIPA Board
Last reviewed: 26 April 2026 · Specialism: commercial property depreciation, warehouse and industrial assets
For Warehouse Tenants

Tenants can claim depreciation too

A depreciation schedule isn't just for the building owner. Where a commercial tenant has paid for and installed fit-out items, racking, equipment, or improvements, those assets are depreciable to the tenant who owns them.

Common tenant-side depreciable items in a warehouse: racking and shelving systems, refrigeration plant, conveyors and material-handling equipment, fork-lift charging infrastructure, partition walls and office fit-outs, security and access control upgrades, and signage. These claims sit separately to anything the landlord claims on the building structure.

Get a tenant fit-out schedule
FAQ

Common questions on warehouse depreciation

The questions warehouse owners, accountants, and SMSF trustees ask MCG most often.

A commercial warehouse depreciation schedule is a 40-year ATO-compliant report prepared by a registered tax agent and quantity surveyor that lists every depreciable asset in the warehouse, its effective life, and the year-by-year tax deductions available under Division 40 (plant and equipment) and Division 43 (capital allowances). For a typical commercial warehouse, the deduction split is approximately 82% Division 43 and 18% Division 40.
High bay lighting, dock levellers, automatic door motors, ventilation systems, security systems, fire extinguishers, hose reels and fire booster pumps, racking and shelving (where owner-supplied), refrigeration plant, door closers, bathroom accessories, and any office fit-out (carpet, blinds, air conditioning, access control). Owner-supplied racking and refrigeration plant often represent the highest plant and equipment values in a logistics warehouse.
Indicative ranges in 2026: smaller warehouses without offices typically cost $500 to $950 per square metre to construct, while larger warehouses or those including offices and amenities run $900 to $1,500 per square metre. Cold storage and distribution centres with dock equipment cost more again ($1,200–$2,200 per m²). These figures are indicative and depend on location, specification, and current construction market conditions. For a tailored estimate, see MCG construction cost estimating.
Approximately 82% Division 43 capital allowances (the building structure itself) and 18% Division 40 plant and equipment. The Division 40 share is higher in warehouses with significant fit-out, refrigeration, automation, or owner-supplied racking. The Division 43 share is higher in basic shells.
Yes. Division 43 capital allowance claims on the original building structure of a non-residential property are only available where construction commenced on or after 20 July 1982. In practice the cutoff is becoming less of an advantage over time: capital works claims run for 40 years from construction, so warehouses built in late 1982 are already past the claim window, and even early-1990s stock has limited runway left. Renovations, extensions, and refurbishments still qualify regardless of the original building age, and Plant and equipment (Division 40) is claimable regardless of the original construction date.
Yes. The second-hand asset restrictions introduced in 2017 apply only to residential investment properties, not commercial. Buyers of existing commercial warehouses can still claim Division 40 deductions on plant and equipment, plus Division 43 capital allowances on any qualifying construction (post-20 July 1982 or qualifying renovations).
Yes, both are claimable as Division 40 plant and equipment. High bay lighting typically has a 10 to 15 year effective life. Dock levellers and dock equipment commonly fall in the 10 to 20 year range depending on the specific equipment. A QS site inspection identifies and values each item against the ATO's effective life schedule. See the full ATO list at ATO effective lives 2026.
Yes. Office fit-out within a commercial warehouse is fully depreciable: carpet, blinds, air conditioning, partition walls, access control, kitchen and bathroom fit-out, security systems. In many warehouses with a meaningful office component, fit-out adds 15 to 25% to the total Division 40 deduction.
Standard turnaround is 2 to 3 weeks from site inspection to delivered schedule. Urgent turnarounds are possible where settlement timing requires it. The schedule is a one-off cost, is itself tax deductible, and covers a full 40 years of deductions.
Yes. Where a tenant has paid for and installed assets in a leased warehouse, the tenant claims depreciation on those assets, not the landlord. Typical tenant-claimable items include racking, refrigeration plant, conveyors, fork-lift infrastructure, office partitions and fit-outs, security upgrades, and signage. These claims sit separately to anything the building owner claims on the structure or owner-supplied plant. We prepare schedules from either side of the lease.
Talk To An Expert

Maximise the deductions on your warehouse

Talk to an MCG tax depreciation specialist on 1300 795 170. Registered tax agents and quantity surveyors, working across Australia.

Request A Quote 1300 795 170
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