We have several clients who are now reviewing their ACC on their sites and discussing with their fire engineer a solution to rectify their property and make safe moving forward.

The ATO have clearly said these costs will be a capital improvement for the purpose of Division 43 of the ITAA 1997 (refer to the link further below).

In financial modelling, this means, if the new cladding installed cost $1m, you can depreciate this cost from completion of installation over the next 40 years (2.5%) which equates to a deduction of $25,000 per year, as an example.

An additional deduction may be allowed to write off the existing cladding, if the original cost and installation was completed after 1979 on hotels (40 year life), commercial, aged care, industrial buildings and similar construction which commenced after 16 September 1987 (2.5%).  As we have qualified quantity surveyors registered on the Tax Practioners Board we can provide this deduction for you.

Below is the link from the ATO which provides some more clarity and discussion.

https://www.ato.gov.au/law/view/view.htm?docid=EV/5010053298616&PiT=99991231235958

If you would like to discuss in more detail, please do not hesitate to contact any of our offices and our Property Tax Depreciation teams will assist.

Merry Xmas on behalf of your Depreciation Trusted Advisors and have a Safe New year

BRISBANE
Paul Mazoletti
National Director
o.  07 3221 8255
m. 0408 749 202
e.  pmazoletti@napierblakeley.com

MELBOURNE
John Mathew
o.  03 9915 6300
m. 0414 559 326
e.  jmathew@napierblakeley.com

SYDNEY
Peter Osborn
o.  02 9299 1899
m. 0439 765 571
e.  posborn@napierblakeley.com

SYDNEY
Peter Guerra
o.  02 9299 1899
m. 0423 567 159
e.  pguerra@napierblakeley.com