Division 40 · whole house
Security alarm system: effective life and depreciation rate
The panel, detectors, siren and code pad are one system with a 5-year life, which it shares with a ceiling fan as the shortest of any common item in a house.
- Effective life
- 5 yrs
- DV · PC rate
- 40% · 20%
- Installed new, 2026
- $1,495
Five years of a security alarm system bought new
A security alarm system costing $1,495, held for each full year, under each method. At $1,495 it is above the $1,000 low-cost threshold, so it is deducted at its own rate. Under diminishing value its written-down value is $897 after one full year, under $1,000, so from year 2 it can go into the low-value pool.
| Year | Diminishing value 40% | Prime cost 20% |
|---|---|---|
| 1 | $598 | $299 |
| 2 | $359 | $299 |
| 3 | $215 | $299 |
| 4 | $129 | $299 |
| 5 | $78 | $299 |
| Five years | $1,379 | $1,495 |
Full years of 365 days. Diminishing value and prime cost are worked by days held ÷ 365 (sections 40-72 and 40-75), so a year that includes 29 February, held throughout, claims 366/365 of what a 365-day year would on the same value. The first year is pro-rated by the days the item is held for earning rent, except in the pool, whose rates are not by the day.
What a security alarm system cost installed, by year
- 2000$920
- 2010$1,108
- 2020$1,250
- 2026$1,495
The effective life of a security alarm system fitted new in a property built in 2021 ends in 2026, while the building's own capital works deduction runs to the 2060–61 income year: see depreciation on a property built in 2021.
Price is for one item, supplied and installed.
Common questions
What is the effective life of a security alarm system?
5 years, as the Commissioner of Taxation determines it for "Control panels" under "Security systems" in the residential property operators' table of the Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025, which most schedules use (an owner may estimate its own instead, section 40-105). One other item here shares it: a ceiling fan.
What is the depreciation rate for a security alarm system?
40% a year under diminishing value (200% ÷ 5), taken from what is left of the value: $598 of the $1,495 it costs installed new in the first full year, $78 in the fifth. Or 20% a year under prime cost (100% ÷ 5), taken from the cost: $299 in each of the first five. An item first held before 10 May 2006 takes 150% ÷ 5 under diminishing value.
Can I claim a security alarm system that came with the property?
Generally not, for an individual, a self-managed super fund or most trusts and partnerships that bought an established property at or after 7.30 pm on 9 May 2017 (section 40-27; the 2017 rules set out who it reaches and the exceptions). Such plant is still valued, at what it costs new in the year the property is bought less its age and condition: for a security alarm system 3 years old in good condition, about $598 of the $1,495 new in 2026, a value whose decline can make a capital gain or loss when it is sold or scrapped. For a security alarm system bought new for the property while it is let, and never used while it was the owner's home, deductions start on the day of installation.
What does it cost to install a security alarm system?
About $1,495 installed new in 2026, from our cost database, and about $1,108 in 2010. The other items here nearest it in price are a pool chlorinator (about $1,288, with a 10-year life) and a dishwasher (about $1,276, with an 8-year life).
Other items
General information only, not advice about your circumstances. Speak to a registered tax agent before relying on it.