Why It Matters

Commercial property depreciation deductions are typically larger than residential.

Commercial properties carry higher-value plant and equipment (commercial-grade air conditioning, fit-out, security, kitchens, automation), fewer regulatory restrictions on Division 40 claims (the 2017 second-hand asset rules don't apply to commercial), and a longer Division 43 eligibility window (back to 20 July 1982 for non-residential structures).

For commercial property investors, SMSF trustees, and accountants advising commercial clients, this means meaningful Division 40 deductions and a useful uplift to net cash flow. A specialist QS site inspection identifies items often missed: commercial HVAC systems, automated doors, lift equipment, fire booster pumps, security and access control, kitchen and amenity fit-outs, and signage. Tenant fit-outs are also depreciable: where the tenant has paid for and installed fit-out items (partitions, joinery, equipment), they may claim Division 40 deductions on those assets, separate to the landlord's schedule.

MCG has prepared depreciation schedules across all major commercial verticals, from small strata-titled offices through to multi-tenant retail centres, distribution hubs, and mixed-use developments with construction values into the tens of millions.

Quick Reference
What makes commercial different from residential?

Division 40 second-hand restrictions: Apply only to residential. Commercial buyers can claim on existing plant and equipment.

Division 43 cutoff date: 20 July 1982 for non-residential, 18 July 1985 for residential. Capital works claims run for 40 years from construction, so the earliest eligible buildings approach end-of-life claim windows.

Plant and equipment proportion: Higher in commercial, especially in hospitality, medical and fit-out heavy properties.

Commercial Verticals

Commercial property types we cover

MCG prepares depreciation schedules across all major Australian commercial property verticals. Click through to see our most detailed write-up on warehouses; the others draw on the same registered-tax-agent quantity surveying methodology.

Commercial Warehouses
High bay lighting, dock levellers, racking, fire systems, refrigeration plant. Distribution centres and logistics hubs.
View warehouse guide
Education, Healthcare & Social Assistance
Schools, childcare, GP clinics, day surgeries, allied health, aged care, NDIS facilities. Specialised treatment equipment and clinical fit-outs.
View healthcare guide
Food and Fuel
Service stations, convenience stores, food retailers. Fuel infrastructure, refrigeration, point-of-sale, security, signage.
View food & fuel guide
Pubs, Clubs & Restaurants
Pubs, RSL clubs, restaurants, cafes, function venues. Commercial kitchens, gaming room equipment, bar fit-out, cool rooms.
View hospitality guide
Farming and Agriculture
Farms, agribusiness, agricultural operations. Sheds, silos, irrigation, livestock infrastructure, processing equipment.
View agriculture guide
Commercial Offices
CBD towers, suburban offices, strata-titled offices. Fit-out, partitioning, ducted HVAC, lifts, access control.
View office guide
Accommodation Providers
Hotels, motels, serviced apartments, short-stay accommodation. Room fit-out, common areas, pools, gyms, F&B back-of-house.
View accommodation guide
Why Commercial Wins

Three structural advantages over residential

Commercial property depreciation is genuinely a different game. Here's why the deductions tend to be larger.

2017
No restrictions
Second-hand plant still claimable
The 2017 second-hand Division 40 restrictions only apply to residential. Buyers of existing commercial property can still claim on plant and equipment in place at settlement.
1982
Capital works window
Wider Division 43 eligibility
Non-residential structures qualify for capital allowances when construction commenced on or after 20 July 1982 (vs 18 July 1985 for residential), within the 40-year claim window. The earliest eligible buildings approach end-of-life claim windows; later builds retain meaningful runway.
30%+
Higher P&E share
More plant & equipment per dollar
Hospitality, medical, retail and industrial fit-outs typically run 30 to 50% Division 40 share versus 18% for bare warehouses or 15-20% for residential, accelerating early-year deductions.
How It Works

From enquiry to lodged schedule in 4 steps

A standard MCG commercial depreciation engagement, end to end.

Send property details
Property type, 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 property, 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 commercial properties ranging from small strata offices through to multi-tenant retail centres, distribution hubs, and mixed-use developments.

Registered Tax Agent (TPB) AIQS Advisory Board PIPA Board
Last reviewed: 26 April 2026 · Specialism: commercial property depreciation across all major commercial verticals
FAQ

Common questions on commercial depreciation

The questions commercial investors, SMSF trustees and accountants ask MCG most often.

A commercial property depreciation schedule is a 40-year ATO-compliant report prepared by a registered tax agent and quantity surveyor that itemises every depreciable asset in a commercial property and the year-by-year deductions available under Division 40 (plant and equipment) and Division 43 (capital allowances). It is the document your accountant uses to claim the maximum legal depreciation deductions on your commercial property tax return.
Three main differences: (1) the 2017 second-hand asset restrictions only apply to residential, so commercial buyers can claim Division 40 on existing assets, (2) commercial properties typically have a higher proportion of plant and equipment (Division 40), and (3) the building structure itself (Division 43) qualifies for non-residential properties built on or after 20 July 1982, vs 18 July 1985 for residential.
Seven dedicated commercial verticals: warehouses; education, healthcare and social assistance (schools, clinics, day surgeries, aged care); food and fuel (service stations, convenience stores); pubs, clubs and restaurants; farming and agriculture; commercial offices (CBD and suburban); and accommodation providers (hotels, motels, serviced apartments). Each has its own dedicated guide page.
Yes. The second-hand asset restrictions introduced in 2017 apply only to residential investment properties, not commercial. Buyers of existing commercial property can still claim Division 40 deductions on plant and equipment, plus Division 43 capital allowances on any qualifying construction (post-20 July 1982 for the original structure, or qualifying renovations of any age).
It varies by property type. Bare-shell warehouses typically run 82% Division 43 / 18% Division 40. Hospitality and medical fit-outs flip much more heavily toward Division 40 (sometimes 50/50 or higher) because of the equipment-rich fit-out (commercial kitchens, medical equipment, refrigeration, automation). Retail sits in between. The QS site inspection establishes the actual split.
Yes. The fee for preparing the depreciation schedule is itself deductible against your commercial property income in the year it is paid. As MCG is a registered tax agent (Tax Practitioners Board), the fee is treated as a tax-related service expense.
Standard turnaround is 2 to 3 weeks from site inspection to delivered schedule for most commercial properties. Larger or more complex properties (multi-tenant centres, hotels, hospitals) may take 4 to 6 weeks. Urgent turnarounds are available where settlement timing requires it.
Talk To An Expert

Maximise the deductions on your commercial property

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

Request A Quote 1300 795 170
Nationwide Coverage

Offices Across Australia

Newcastle Sydney Melbourne Brisbane Perth Canberra Adelaide