Why It Matters

The per-room multiplier turns modest fit-out values into substantial total deductions.

Accommodation properties are unique in commercial depreciation because of the per-room multiplier. A 200-room hotel with $15,000 of depreciable per-room fit-out is sitting on $3 million of Division 40 plant from rooms alone, before you even count common areas, F&B back-of-house, lifts, pools, gyms, and function spaces. Combined with hospitality refurb cycles (every 7-10 years), accommodation runs one of the highest cumulative deduction profiles of any commercial vertical.

A specialist QS site inspection captures items often missed: in-room safes, mini-bars, smart TVs, room control systems, BMS, pool plant, gym equipment, spa and sauna infrastructure, F&B kitchen equipment, function room AV, lift componentry, EV charging where present, and rooftop PV/solar.

MCG has prepared depreciation schedules for branded hotels, motels, serviced apartments (whole-building and strata-titled), short-stay accommodation, holiday parks, and accommodation REITs across Australia.

Quick Reference
Why accommodation runs high deductions

Per-room multiplier: Modest per-room fit-out values multiplied across high room counts.

Heavy common-area plant: Lifts, pools, gyms, F&B back-of-house, function spaces.

Refurb cycles: 7-10 year refresh cycles create ongoing depreciation events.

Hospitality fit-out density: Restaurants, bars, conferencing add Division 40.

Why Use MCG

What you get from an accommodation-specialist QS

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

Representative room methodology
QS inspects a representative sample of rooms (varying types) and applies validated multipliers across the full room count.
Common-area capture
Lobby, lifts, pools, gyms, spas, function rooms, F&B back-of-house all itemised separately. Often the second-largest Div 40 category.
40-year compliant schedule
Full ATO-compliant report showing both Prime Cost and Diminishing Value, year-by-year, every asset.
Strata apportionment
For strata-titled serviced apartments, we handle individual lot fit-out plus apportioned common-property capital allowance items.
3 to 4 week turnaround
From site inspection to delivered schedule. Larger multi-tower or resort properties 6-8 weeks. Bulk-portfolio rates available.
Registered tax agent
MCG is a Tax Practitioners Board registered tax agent firm. The schedule itself is tax deductible.
What's Depreciable

Depreciable assets typical to an accommodation property

Two broad asset groups: per-room (multiplied by room count) and common areas / back-of-house.

Per-Room Fit-Out

In-room depreciable assets

Multiplied across the total room count for total Division 40 value

  • Beds, mattresses, bedding basesWhere owned (not leased). 8-10 year typical effective life.
  • Joinery and built-in furnitureWardrobes, desks, headboards, bedside tables, custom millwork.
  • In-room electronicsSmart TVs, room control systems, in-room safes, mini-bar fridges, kettles, hairdryers.
  • Carpet, flooring, window treatmentsCarpet 8-yr life, blinds 10-yr. Significant across many rooms.
  • Bathroom fit-outVanities, mirrors, hand dryers, exhaust fans, hot water systems (where in-room).
  • In-room HVACSplit systems, fan coil units, thermostats. Often standardised across room types.
  • Door hardware and accessElectronic locks, keycard readers, intercom, emergency lighting.
Common Areas & BoH

Common-area, F&B, and back-of-house

Heavy plant categories that often equal or exceed the per-room total

  • Lifts and lift equipmentCars, motors, control gear, doors. Multiple lifts in larger hotels, each separately depreciable.
  • Lobby and receptionReception desk, AV displays, signage, lobby furniture, lighting, decorative finishes.
  • Pool, spa and gymPool plant (pumps, filters, heating), gym equipment, spa baths, sauna, steam room infrastructure.
  • F&B back-of-houseCommercial kitchen (ovens, fryers, cool rooms), restaurant fit-out, bar fit-out, cellar refrigeration.
  • Function roomsAV systems, lighting rigs, sound systems, partitioning, dance floors, staging.
  • Building servicesCentral HVAC, BMS, fire suppression, hot water plant, generators, EV charging where present.
  • Housekeeping & laundryIndustrial laundry equipment (where on-site), housekeeping carts, linen storage racking.
How It Works

From enquiry to lodged schedule in 4 steps

A standard MCG accommodation depreciation engagement, end to end.

Send property details
Address, room count by type, settlement date, freehold or strata, recent refurb history, F&B and amenity inventory.
QS site inspection
A registered QS attends the property, inspects representative rooms across types, plus all common areas and back-of-house.
Schedule prepared
40-year compliant report. Per-room values applied via room count multiplier, common areas itemised separately. Both methods.
Lodge with your tax return
Hand the schedule to your accountant or use it for self-prepared returns. Schedule fee 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. MCG has prepared depreciation schedules for branded hotels, motels, serviced apartments (whole-building and strata-titled), short-stay accommodation, holiday parks, and accommodation REITs across Australia.

Registered Tax Agent (TPB) AIQS Advisory Board PIPA Board
Last reviewed: 26 April 2026 · Specialism: hotel and accommodation property depreciation
FAQ

Common questions on accommodation depreciation

The questions hotel owners, motel operators, and serviced apartment investors ask MCG most often.

A hotel or accommodation depreciation schedule is a 40-year ATO-compliant report itemising every depreciable asset across the property: per-room fit-out (multiplied by room count), common areas (lobby, lifts, pools, gyms), F&B back-of-house (commercial kitchens, restaurants, bars), function rooms, and back-of-house operations. Per-room values multiplied across high room counts make accommodation properties unusually deduction-rich.
The QS values the depreciable items in a representative room (carpet, joinery, beds where owned, mini-bar fridges, in-room safes, smart TVs, room control systems, bathroom fit-out) and multiplies by the total room count. For a 200-room hotel, even modest per-room fit-out values translate to substantial total Division 40 deductions.
Hotels and serviced apartments typically run 35-50% Division 40 share (significantly higher than the 18% of bare warehouses). The driver is the dense per-room fit-out multiplied across many rooms, plus heavy common-area plant: lifts, HVAC, pool plant, gym equipment, F&B back-of-house, AV. Luxury hotels and resorts can push 50%+.
Yes. Pool plant (pumps, filters, heating, chlorination), gym equipment, spa equipment, sauna, and steam room infrastructure are all Division 40 plant and equipment with their own effective lives. The pool shell itself is generally Division 43 capital allowance. Equipment is captured separately from the building structure.
For strata-titled serviced apartments, the schedule covers your individual lot's fit-out, plus your apportioned share of common-property capital allowance items (lifts, lobby, pool, gym, common-area HVAC). MCG works with the strata schedule to apportion correctly. The owner-managed letting pool and operating fit-out also factors in.
Yes, where you (the operator) own the FF&E (furniture, fixtures and equipment) and any leasehold improvements. Operator-owned plant and equipment is depreciable in your name. Leasehold improvements (fit-out you've installed) are depreciable under Division 43 over the lease term or asset effective life, whichever is shorter.
Standard turnaround is 3 to 4 weeks for a single hotel or motel. Larger properties (multi-tower hotels, resort precincts, holiday parks with multiple buildings) can take 6 to 8 weeks. The QS attends in person to inspect a representative sample of rooms plus all common areas and back-of-house.
Talk To An Expert

Maximise the deductions on your accommodation property

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

Request A Quote 1300 795 170
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