Depreciation Calculator Australia (Div 40 & Div 43)
Calculate 2025-26 or 2026-27 depreciation schedules for Australian investment property and business assets, including first-year days and remaining Division 43 life.
Uses ATO days-held formulas and selected-year income tax rules. A formal schedule may still be needed to establish construction expenditure and eligibility.
Sets the first schedule year and the tax rules used for the optional saving estimate.
Original construction cost (not purchase price of land + building)
When completed capital works first became income-producing. Use the date on your QS schedule where available.
The rate depends on construction-start date and use—not simply “residential vs commercial”. Confirm 4% eligibility from your schedule.
The ATO apportions the first-year deduction by eligible days over 365. Use acquisition/availability date for an existing rental building.
Number of years to show (1-40)
Percentage used for private purposes (0 = fully deductible)
Shows the income tax and Medicare reduction using 2025-26 rules. HELP and MLS effects are excluded.
Enter building details to calculate depreciation schedule
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| Feature | Division 43 (Capital Works) | Division 40 (Plant & Equipment) |
|---|---|---|
| What it covers | Building structure (walls, roof, foundations) | Removable assets (appliances, carpets, blinds) |
| Method | Straight-line only | Diminishing value OR prime cost |
| Rate | Usually 2.5%; 4% only where construction-period and use tests are met | Based on effective life of each asset |
| Second-hand property | Can claim on remaining life | Cannot claim existing items (from 1 Jul 2017) |
| Evidence | Actual construction costs, or an independent qualified estimate where costs cannot be determined | Cost, start date, taxable-use records and effective life |
Division 43 deduction by construction cost
The annual capital works deduction is a percentage of qualifying construction expenditure: commonly 2.5% over a maximum 40 years, or 4% over 25 years where the relevant construction-period and use tests are met. Existing buildings only have the balance of that period remaining.
| Construction cost | General 2.5% full year | Eligible 4% full year |
|---|---|---|
| $200,000 | $5,000 | $8,000 |
| $300,000 | $7,500 | $12,000 |
| $400,000 | $10,000 | $16,000 |
| $500,000 | $12,500 | $20,000 |
| $750,000 | $18,750 | $30,000 |
Full-year illustration only. Apply the rate shown on the capital works schedule and limit the claim to eligible days and remaining undeducted construction expenditure.
For Division 40 assets, you can choose between two depreciation methods. Once chosen, you cannot switch methods for that asset.
Diminishing Value Method
Rate = 200% / Effective Life
Annual deduction = Base value × days held ÷ 365 × rate
Example: $10,000 asset, 5-year life: Rate = 40%. Year 1: $4,000, Year 2: $2,400, Year 3: $1,440...
Diminishing value gives larger deductions in the early years and smaller ones later. It never fully reaches zero, but the remaining value becomes negligible over time.
Prime Cost Method
Rate = 100% / Effective Life
Annual deduction = Original cost × days held ÷ 365 × rate
Example: $10,000 asset, 5-year life: Rate = 20%. Each year: $2,000 for 5 years.
Prime cost gives equal deductions each year. The asset is fully written off at the end of its effective life.
First-year pro-rata is included: enter the date the asset was first used or installed ready for use. The schedule applies the ATO's days-held ÷ 365 formula; the numerator can be 366 in a leap year.
| Asset | Effective Life | DV Rate | PC Rate |
|---|---|---|---|
| Laptop / desktop computer | 4 years | 50% | 25% |
| Furniture (desks, chairs) | 10 years | 20% | 10% |
| Air conditioning units | 10 years | 20% | 10% |
| Carpets | 8 years | 25% | 12.5% |
| Hot water system | 12 years | 16.67% | 8.33% |
| Washing machine / dryer | 7 years | 28.57% | 14.29% |
| Blinds and curtains | 8 years | 25% | 12.5% |
| Fridge | 10 years | 20% | 10% |
| Oven / cooktop | 12 years | 16.67% | 8.33% |
| Motor vehicle | 8 years | 25% | 12.5% |
You can choose to self-assess a shorter effective life if you can demonstrate the asset will be used in a way that wears it out faster. See ATO effective life tables for the complete list.
If an asset is used partly for private purposes, you can only claim the business-use percentage. For example, a laptop used 60% for work and 40% for personal use can only depreciate 60% of its cost.
Assets costing less than $1,000, or those written down below $1,000, can be placed in a low-value pool: 18.75% in the first year (the year you allocate the asset), then 37.5% of the opening pool balance each year after. Once added, items cannot be removed.
For 2026-27, eligible small businesses with aggregated turnover under $10,000,000 may immediately deduct eligible assets costing less than $20,000 under the simplified depreciation rules. Check eligibility before using general Div 40 instead.
Use our dedicated IAWO calculator →The car depreciation cost limit is $69,883 for 2026-27. Effective life depends on the asset description and when it was first used; confirm the current Commissioner's determination rather than relying only on a generic category.
Read the ATO depreciation rates 2026-27 guide →What is the difference between Division 40 and Division 43 depreciation?
Should I use diminishing value or prime cost depreciation?
What is the depreciation rate for a residential investment property?
Can I claim depreciation on a second-hand property?
What is the low-value pool threshold?
Do I need a depreciation schedule from a quantity surveyor?
How much depreciation can I claim on a $400,000 investment property?
How does claiming depreciation affect capital gains tax when I sell?
Tax Accuracy & Sources
Generates indicative 2025-26/2026-27 schedules for Division 40 and Division 43. It applies days-held apportionment, remaining capital-works expenditure, private-use adjustment and selected-year income tax plus Medicare effects. It does not model pooling, balancing adjustments, GST, HELP, MLS or all eligibility exceptions.