2017 to today
Depreciation on a property built in 2020
A residential building whose construction began in 2020 is deducted at 2.5% of its construction cost a year, for construction begun after 15 September 1987. Counting from 30 June 2020, its 40 years run from the 2020–21 income year to 2059–60, and from 2026–27 it has 34 income years left. Our national series puts new houses at $1,465 per m² of floor area in the year to 30 June 2020, 5% up on 2019's $1,398.
- Rate
- 2.5%
- Years left
- 34
- Last year
- 2059–60
What a house built in 2020 cost, state by state
A standard 200 m² single-storey brick veneer house at 2020 rates, less the builder's plant (3.1% of its cost that year), listed separately; the deduction is 2.5% of it a year.
| State | Rate per m² in 2020 | Construction cost | Deduction a year | Left to claim |
|---|---|---|---|---|
| New South Wales | $1,621 | $294,592 | $7,365 | $250,410 |
| Victoria | $1,427 | $259,372 | $6,484 | $220,456 |
| Queensland | $1,303 | $236,846 | $5,921 | $201,314 |
| Western Australia | $1,010 | $183,525 | $4,588 | $155,992 |
| South Australia | $905 | $164,482 | $4,112 | $139,808 |
| Tasmania | $1,449 | $263,380 | $6,585 | $223,890 |
| Australian Capital Territory | $1,330 | $241,799 | $6,045 | $205,530 |
| Northern Territory | $2,056 | $373,633 | $9,341 | $317,594 |
Indicative. "Left to claim" is the deduction a year times the 34 income years left; the first and last are usually part years.
The cost per m² around 2020
From 2019 to 2020 the standard house's rate per m² rose 0.6%, from $1,336 to $1,344: the 36th steepest of the 40 year-on-year changes since 1985. In 2021 it rose 5% again, to $1,406. At 2025's rates it costs $347,938 to build, 1.4 times its 2020 cost of $244,243, and the deduction is worked from the 2020 figure.
Building in 2020, nationally
The ABS measure: the value of new houses built (land excluded) over their floor area, so it follows the kind of house as well as prices, and its 2020 is the year to 30 June 2020.
The rate per m²
Our national series puts new houses in the year to 30 June 2020 at $1,465 per m² of floor area, 5% up on 2019's $1,398 and 37% up over the ten years from 2010's $1,073.
The average new house
We put the average new house of 2020 at 235.8 m² of floor area, the ABS's 2020 figure: at 2020's $1,465 per m², it cost about $345,000 to build.
How the figure was reached
How 2020's figure was arrived at: the published ABS average cost over the published average floor area. It rests on 2 sources and is graded A, from A (a published figure) to D (an assumed rate of growth).
2020 in Division 43's history
- Counting the calendar year each began in as its first, 2020 is the 36th year of capital works for homes (from 18 July 1985), the 34th year of the rate of 2.5% over 40 years (from 16 September 1987), the 29th year of structural improvements' claims (from 27 February 1992) and the 4th year of section 40-27 on second-hand plant (from 7.30 pm on 9 May 2017).
Where it stands in 2026–27
2026–27 is the 7th of its 40 income years at 2.5%. 34 income years, this one counted, carry 85% of its construction cost; the 15% of the 6 years before is spent, whoever owned it then. The first half of its years ends with 2039–40.
A kitchen replaced ten years on, in 2030, is new capital works with 40 years of its own, claimed until 2070: 10 years past 2020's own last income year, 2059–60. Every renovation since 2020 is the same, whatever the house's own date; its invoices and photos date it.
Renovating a rental built in 2020: the old plant and works Houses of 2017 to today beside the other years Using a previous owner's scheduleA standard house's plant, fitted new in 2020
In 2020 the builder's plant was about 3.1% of a standard house's cost, listed apart from the building; plant prices stood at 100% of 2020's by our plant index, and the ABS house construction price index for Australia stood at 100% of its June quarter 2020 level in the June quarter 2020. Fitted in 2020, with each life counted from 30 June 2020 as the building's years are, none below has passed its effective life, the first ending in 2027–28; a replacement bought new for a let property starts its own.
| Item | Installed new, 2020 prices | Effective life | Life ends, income year |
|---|---|---|---|
| Oven | $1,600 | 12 years | 2031–32 |
| Cooktop | $630 | 12 years | 2031–32 |
| Dishwasher | $1,067 | 8 years | 2027–28 |
| Electric hot water system | $1,450 | 12 years | 2031–32 |
| Carpet | $3,800 | 8 years | 2027–28 |
| Blinds | $1,450 | 10 years | 2029–30 |
Common questions
How much depreciation can I claim on a house built in 2020?
On a 2020 building, 2.5% of what it cost to construct, each year until 2059–60. For a standard 200 m² brick veneer house that is about $7,365 a year in New South Wales, $6,484 in Victoria and $5,921 in Queensland, with 34 income years left. Plant new to you adds to that, as does any renovation since 2020.
I bought a 2020 property second-hand. Does the deduction start again?
No: a 2020 building's 40 years run from its completion, not from your purchase, so a buyer claims the 34 income years left, 2026–27 to 2059–60, on the original construction cost rather than the price paid. Fitted new in 2020, 50 of the 181 kinds of plant our catalogue prices have passed their effective lives, and the other 131 end from 2026–27 to 2049–50. A 2020 house has only ever been under section 40-27, from 7.30 pm on 9 May 2017: bought from an earlier owner, the plant that came with a 2020 house is generally not deductible (the 2017 rules set out who it reaches and the exceptions). Bought new, nobody having lived in it, its plant is generally deductible as well, provided no earlier owner could deduct for it, unless you live in it before renting it out.
What was the rate for 2020?
2.5% a year over 40 years, for construction begun after 15 September 1987: counting from 30 June 2020, the 2020–21 to 2059–60 income years. Construction begun on any day of 2020 qualifies, the window having opened on 16 September 1987, and 6 of its 40 income years have passed.
What did it cost to build a house in 2020?
In the year to 30 June 2020, our national series puts new houses at $1,465 per m² of floor area, 37% up over the ten years from 2010's $1,073, and the average new house, about 236 m², cost about $345,000 to build. At 2020's rates, our standard 200 m² single-storey brick veneer house, less the plant listed separately, cost about $244,243 at the national rate, against $242,467 in 2019 and $255,334 in 2021. In 2020 it was cheapest in South Australia, at $164,482, and dearest in the Northern Territory, at $373,633. Where the 2020 build's own cost is not documented, a schedule estimates it at 2020's rates, about $244,243 for that house nationally, by an appropriately qualified person, as Taxation Ruling TR 97/25 accepts.
General information only, not advice about your circumstances. Speak to a registered tax agent before relying on it.