Tax Depreciation Rates (ATO) – 2012 Rates for your residential investment property
In previous posts we’ve looked at how effective lives are calculated, how depreciation rates are calculated and the difference between the diminishing value and prime cost methods.
As we often get questions about the specific effective lives for residential property, we’ve decided to post the current effective lives here. These effective lives are current at the time of posting, and come from Tax Ruling 2011/2 (TR 2011/2). This legislation replaced TR 2010/2 and applies from the 1st of July 2011 to the present. We expect there to be an update to this ruling prior to the start of the next financial year, however the residential list is not as dynamic as the commercial one. Consequently, we don’t expect too many changes but will keep you updated nonetheless. Most of these effective lives are unchanged from 2003/2004.
As a reminder, for all property purchased after the 10th of May 2006, the diminishing value rate will be 200 divided by the effective life, and the prime cost method rate is 100 divided by the effective life. More information on that calculation is available here.
| ASSET | LIFE |
| (YEARS) | |
| Assets generally: | |
| Air conditioning assets (excluding ducting, pipes and vents): | |
| Air handling units | 20 |
| Chillers: | |
| Absorption | 25 |
| Centrifugal | 20 |
| Volumetrics (including reciprocating, rotary, screw, scroll): | |
| Air-cooled | 15 |
| Water-cooled | 20 |
| Condensing sets | 15 |
| Cooling towers | 15 |
| Damper motors (including variable air volume box controller) | 10 |
| Fan coil units (connected to condensing set) | 15 |
| Mini split systems up to 20KW (including ceiling, floor and high wall split system) | 10 |
| Packaged air conditioning units | 15 |
| Pumps | 20 |
| Room units | 10 |
| Ceiling fans | 5 |
| Clocks, electric | 10 |
| Digital video display (DVD) players | 5 |
| Door closers | 10 |
| Door stops, freestanding | 10 |
| Escalators (machinery and moving parts) | 20 |
| Evaporative coolers: | |
| Fixed (excluding ducting and vents) | 20 |
| Portable | 10 |
| Floor coverings (removable without damage): | |
| Carpet | 10 |
| Floating timber | 15 |
| Linoleum | 10 |
| Vinyl | 10 |
| Furniture, freestanding | 13 1/3 |
| Garbage bins | 10 |
| Garbage compacting systems (excluding chutes) | 6 2/3 |
| Generators | 20 |
| Gym assets: | |
| Cardiovascular | 5 |
| Resistance | 10 |
| Hand dryers, electrical | 10 |
| Heaters: | |
| Fixed: | |
| Electric | 15 |
| Gas: | |
| Ducted central heating unit | 20 |
| Other | 15 |
| Freestanding | 15 |
| Hot water systems (excluding piping): | |
| Electric | 12 |
| Gas | 12 |
| Solar | 15 |
| Intercom system assets | 10 |
| Lifts (including hydraulic and traction lifts) | 30 |
| Lights: | |
| Fittings (excluding hardwired) | 5 |
| Freestanding | 5 |
| Shades, removable | 5 |
| Linen | 5 |
| Master antenna television (MATV) assets: | |
| Amplifiers | 10 |
| Modulators | 10 |
| Power sources | 10 |
| Mirrors, freestanding | 15 |
| Radios | 10 |
| Rugs | 7 |
| Solar power generating system assets | 20 |
| Stereo systems (incorporating amplifiers, cassette players, compact disc players, radios and speakers) | 7 |
| Surround sound systems (incorporating audio-video receivers and speakers) | 10 |
| Telecommunications assets: | |
| Cordless phones | 4 |
| PABX computerised assets | 10 |
| Telephone hand sets | 10 |
| Television antennas, freestanding | 5 |
| Television sets | 10 |
| Vacuum cleaners: | |
| Ducted: | |
| Hoses | 10 |
| Motors | 10 |
| Wands | 10 |
| Portable | 10 |
| Ventilation fans | 20 |
| Video cassette recorder systems (VCR) | 5 |
| Water pumps | 20 |
| Window blinds, internal | 10 |
| Window curtains | 6 |
| Window shutters, automatic: | |
| Controls | 10 |
| Motors | 10 |
| Bathroom assets: | |
| Accessories, freestanding (including shower caddies, soap holders, toilet brushes) | 5 |
| Exhaust fans (including light/heating) | 10 |
| Heated towel rails, electric | 10 |
| Shower curtains (excluding curtain rods and screens) | 2 |
| Spa bath pumps | 20 |
| Fire control assets: | |
| Alarms: | |
| Heat | 6 |
| Smoke | 6 |
| Detection and alarm systems: | |
| Alarm bells | 12 |
| Detectors (including addressable manual call points, heat, multi type and smoke) | 20 |
| Fire indicator panels | 12 |
| Emergency warning and intercommunication systems (EWIS): | |
| Master emergency control panels | 12 |
| Speakers | 12 |
| Strobe lights | 12 |
| Warden intercom phone | 12 |
| Extinguishers | 15 |
| Hoses and nozzles | 10 |
| Pumps (including diesel and electric) | 25 |
| Stair pressurisation assets: | |
| A C variable speed drives | 10 |
| Pressurisation and extraction fans | 25 |
| Sensors | 10 |
| Kitchen assets: | |
| Cook tops | 12 |
| Crockery | 5 |
| Cutlery | 5 |
| Dishwashers | 10 |
| Freezers | 12 |
| Garbage disposal units | 10 |
| Microwave ovens | 10 |
| Ovens | 12 |
| Range hoods | 12 |
| Refrigerators | 12 |
| Stoves | 12 |
| Water filters, electrical | 15 |
| Laundry assets: | |
| Clothes dryers | 10 |
| Ironing boards, freestanding | 7 |
| Irons | 5 |
| Washing machines | 10 |
| Outdoor assets: | |
| Automatic garage doors: | |
| Controls | 5 |
| Motors | 10 |
| Barbecue assets: | |
| Fixed barbecue assets: | |
| Sliding trays and cookers | 10 |
| Freestanding barbecues | 5 |
| Floor carpet (including artificial grass and matting) | 5 |
| Furniture, freestanding | 5 |
| Gardening watering installations: | |
| Control panels | 5 |
| Pumps | 5 |
| Timing devices | 5 |
| Garden lights, solar | 8 |
| Garden sheds, freestanding | 15 |
| Gates, electrical: | |
| Controls | 5 |
| Motors | 10 |
| Operable pergola louvres: | |
| Controls | 15 |
| Motors | 15 |
| Sauna heating assets | 15 |
| Sewage treatment assets: | |
| Controls | 8 |
| Motors | 8 |
| Spas: | |
| Fixed spa assets: | |
| Chlorinators | 12 |
| Filtration assets (including pumps) | 12 |
| Heaters (electric or gas) | 15 |
| Freestanding spas (incorporating blowers, controls, filters, heaters and pumps) | 17 |
| Swimming pool assets: | |
| Chlorinators | 12 |
| Cleaning assets | 7 |
| Filtration assets (including pumps) | 12 |
| Heaters: | |
| Electric | 15 |
| Gas | 15 |
| Solar | 20 |
| Tennis court assets: | |
| Cleaners | 3 |
| Drag brooms | 3 |
| Nets | 5 |
| Rollers | 3 |
| Umpire chairs | 15 |
| Security and monitoring assets: | |
| Access control systems: | |
| Code pads | 5 |
| Door controllers | 5 |
| Readers: | |
| Proximity | 7 |
| Swipe card | 3 |
| Closed circuit television systems: | |
| Cameras | 4 |
| Monitors | 4 |
| Recorders: | |
| Digital | 4 |
| Time lapse | 2 |
| Switching units (including multiplexes) | 5 |
| Security systems: | |
| Code pads | 5 |
| Control panels | 5 |
| Detectors (including passive infra-red, photo sensors and vibration) | 5 |
| Global System for Mobiles (GSM) Units | 5 |
| Noise makers (including bells and sirens) | 5 |
It’s important to note that for a particular asset, if you were using an effective life from the determination as in force before the latest amendment (for example, as contained in the Schedule to TR 2010/2), you should continue to use that life for that asset.
There are also specific rules for plant and equipment items acquired prior and post the 21st of September 1999, which can be found in the ruling itself linked below.
We provide a copy of the current effective lives here for convenience and more information can be found via the ruling itself here.
Remember that there is more to tax depreciation that applying the correct effective life and calculating the rate. Legislation allowing immediate deductions and low value pools also come into play. It’s important that you engage a suitably qualified tax depreciation expert to prepare your report, as the ATO state that valuers, real estate agents, accountants and solicitors do not have the relevant qualifications or experience to assess and calculate the capital allowances and residual values relating to construction costs.