Division 43 (capital works)
Depreciation on the building itself - bricks, concrete, fixed structures.
Division 43 is depreciation on the structural elements of the building - the bricks, concrete, walls, roof, built-in cabinetry, tiles, and structural improvements. For residential properties built after 16 September 1987, capital works depreciate at 2.5% per year over a 40-year effective life. Properties built between 18 July 1985 and 15 September 1987 get a transitional 4% rate. Anything older than 18 July 1985 generally gets no capital works deduction (though renovations done since that date by anyone, including a previous owner, do qualify). Unlike Division 40, the 2017 second-hand rule does NOT affect Division 43 - you can claim it on any qualifying building regardless of when you bought.
Worked example
A house built in 2010 cost $250,000 to construct. You can claim 2.5% per year (about $6,250) as a Div 43 deduction every year for 40 years from completion, regardless of how many times the property changes hands.
Source: ATO - Capital works deductions->
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