Division 40 (plant and equipment)

Division 40 covers the depreciation of plant and equipment - the assets inside an investment property that wear out over time and can be removed without damaging the building. Think dishwashers, ovens, carpets, blinds, hot water systems, air conditioners, ceiling fans. Each asset has an effective life set by the ATO and depreciates against your rental income each year. Since the May 2017 budget changes, second-hand plant and equipment in residential properties is no longer deductible for individual investors who bought after 9 May 2017 - only brand new assets (or assets in a new build) qualify. The rule doesn't affect commercial property or assets owned by companies.