Division 40 · living areas and bedrooms
Split-system air conditioner: effective life and depreciation rate
The indoor head and the outdoor condenser are one asset. Each room's unit is a separate asset with its own data plate and date.
- Effective life
- 10 yrs
- DV · PC rate
- 20% · 10%
- Installed new, 2026
- $2,751
Some rooms have a window or wall air conditioner instead: one box through the wall or window, with no outdoor unit, on the same 10-year life, at about $861 new (a shelf price, its fitting not priced), under $1,000, so it can go into the low-value pool. The guide to diminishing value or prime cost works its example on a split system.
Five years of a split-system air conditioner bought new
A split-system air conditioner costing $2,751, held for each full year, under each method. At $2,751 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 $902 after five full years, under $1,000, so from year 6 it can go into the low-value pool.
| Year | Diminishing value 20% | Prime cost 10% |
|---|---|---|
| 1 | $550 | $275 |
| 2 | $440 | $275 |
| 3 | $352 | $275 |
| 4 | $282 | $275 |
| 5 | $225 | $275 |
| Five years | $1,849 | $1,375 |
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 split-system air conditioner cost installed, by year
- 2000$1,693
- 2010$2,038
- 2020$2,300
- 2026$2,751
The effective life of a split-system air conditioner fitted new in a property built in 2016 ends in 2026, while the building's own capital works deduction runs to the 2055–56 income year: see depreciation on a property built in 2016.
Price is for one item, supplied and installed.
By dwelling type
Our dwelling pages price a split-system air conditioner with the typical plant of a house and a unit in every state; two states of each:
Each is priced at its state's rates, and the state's own page sets the four types side by side: New South Wales, Victoria, Queensland and Western Australia.
Common questions
What is the effective life of a split-system air conditioner?
10 years, as the Commissioner of Taxation determines it for "Mini split systems up to 20 KW (including ceiling, floor and high wall split system)" under "Air conditioning assets (excluding ducting, pipes and vents)" 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). Ten of the other 36 items here share it, among them blinds and a pool chlorinator.
What is the depreciation rate for a split-system air conditioner?
20% a year under diminishing value (200% ÷ 10), taken from what is left of the value: $550 of the $2,751 it costs installed new in the first full year, $225 in the fifth. Or 10% a year under prime cost (100% ÷ 10), taken from the cost: $275 in each of the first five. An item first held before 10 May 2006 takes 150% ÷ 10 under diminishing value.
Can I claim a split-system air conditioner 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 split-system air conditioner 5 years old in good condition, about $1,376 of the $2,751 new in 2026, a value whose decline can make a capital gain or loss when it is sold or scrapped. For a split-system air conditioner 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 split-system air conditioner?
About $2,751 installed new in 2026, from our cost database, and about $2,038 in 2010. The other items here nearest it in price are curtains (about $2,571, with a 6-year life) and a rainwater tank (about $3,169, with a 15-year life).
Other items
- Ducted air conditioning · 15 yrs
- Window or wall air conditioner · 10 yrs
- Evaporative cooler · 15 yrs
- Gas space heater · 15 yrs
- Ceiling fan · 5 yrs
- Exhaust fan · 10 yrs
- Smoke alarm · 6 yrs
- Security alarm system · 5 yrs
- All items
Air conditioning assets (excluding ducting, pipes and vents) in the Commissioner's table
General information only, not advice about your circumstances. Speak to a registered tax agent before relying on it.