Commercial Warehouses

Whilst warehouses may typically have a lower construction cost per square meter than most other commercial properties, we do see them provide significant deductions based on the size of the building and associated plant assets. Construction costs vary from $500 - $950 per sqm for smaller warehouses without offices to $900 - $1,500 per sqm for Larger warehouses or warehouses with an office and amenities. Typically, warehouses occupy the majority of the area of the land parcel, which can result in construction cost estimates being very close to the overall purchase price.

Additionally, there are a few key plant and equipment assets within warehouses that result in higher depreciation rates than the building structure, resulting in high claims in the first few years of the schedule. 

Case Study - Warehouse -Dandenong South, VIC

Typically, warehouses will have plant and equipment assets such as;

  • High Bay Lighting
  • Automatic door motors
  • Fire Extinguishers, Hose Reels & Fire Booster Pumps
  • Security Systems
  • Dock Levelers
  • Door Closers
  • Ventilation Systems
  • Bathroom Accessories

Warehouses with office spaces attract even more plant asset deductions such as;

  • Window Blinds
  • Carpets
  • Air Conditioning Systems
  • Door Control/Entry Systems
  • Bathroom Accessories and more.

The total depreciation entitlements for a warehouse will consist of two components;

  • Division 40 Plant & Equipment Deductions, and;
  • Division 43 Capital Allowances.

With the plant and equipment being covered about in brief, the division 43 deductions essentially equate to the structure itself. Our process where the construction cost is not known, is to estimate the total cost to build as at the construction date. For example, the building may have been constructed in 1992.  Whilst there is no cut-off date for depreciation on the plant and equipment items, their value will decline each year until the value has run out. For warehouses, the cut-off date for division 43 claims on the original building structure is 20th July 1982. However, if the property has been renovated or extended, those improvements can still qualify, regardless of the age of the original structure.

Typical deductions depend heavily on both the size, type and age of the warehouse. However, typically we see around 82% of the total construction value being division 43 (building structure claims) and 18% relating to the plant and equipment assets.

MCG have vast experience with warehouses and have completed reports from small strata titled warehouses to major scale transportation and manufacturing hubs with construction values into the tens of millions.

A Quantity Surveyor should be able to answer all of your detailed questions and will ensure that no items are missed, the maximum claim is made and that the report complies with the ever changing rules prescribed by the Australian Taxation Office (ATO).

We service Sydney, Newcastle, Parramatta, Melbourne, Brisbane, Adelaide, Perth & Regional Australia.

Talk to one of our tax depreciation experts today
on 1300 795 170 to ensure you have a professional
maximising your tax depreciation deductions.