Building depreciation applies to the original structure of an investment property. This includes the construction cost of the building and structural elements such as foundations, walls and roof.
Residential buildings constructed after 16 September 1987 generally depreciate at 2.5% per year for 40 years using the Prime Cost method.
In TaxTank, this is recorded as Building at Cost within the Building & Improvements section.
How to Add Building Depreciation
Step 1 – Add Depreciation
Go to the Depreciation tab under the relevant property.
Click Add.
Step 2 – Select Building & Improvements
From the switcher, select Building & Improvements.
Step 3 – Select Building at Cost
From the Category dropdown, select Building at Cost.
Step 4 – Enter Building Details
Complete the following fields:
Amount
Enter the building construction cost (excluding land).
Building Date
Enter the date the building was originally completed.
This determines the start of the 40-year capital works depreciation period.
Schedule Start Date
Enter the date depreciation should begin in your schedule.
This will usually be:
the date you purchased the property, or
the date the property became income-producing (for example when it was first rented).
💡 Tip: The Building Date determines the overall depreciation period, while the Schedule Start Date ensures depreciation is calculated correctly from when you owned or rented the property.
Example
A property was built in July 2010 and originally cost $320,000 to construct (building component only). The investor purchased the property in July 2022.
Building Date: July 2010
Schedule Start Date: July 2022
Because capital works lasts 40 years, the total depreciation period runs from 2010 to 2050. By the time the investor purchased the property in 2022, 12 years of the capital works period had already passed.
TaxTank will automatically calculate:
Depreciation already used: 2010–2022
Remaining claimable depreciation: 2022–2050 (28 years remaining)
If the property later becomes owner-occupied and then rented again, the schedule start date can be updated to reflect when the property returned to income-producing use. This ensures depreciation and CGT capital works adjustments remain accurate across the full ownership period.