Division 40 · a bedroom or living room
Window or wall air conditioner: effective life and depreciation rate
A box unit through the wall is plant with a 10-year life, the same as a split system.
- Effective life
- 10 yrs
- DV · PC rate
- 20% · 10%
- Supplied new, 2026
- $861
Unlike a split-system air conditioner, whose indoor head and outdoor condenser are one asset at about $2,751 installed new, it is one box, on the same 10-year life, at about $861. The opening cut for it is part of the wall, and so of the building, not of the unit. In a house with ducted air conditioning, a unit in a room the ducts do not reach is an asset of its own.
Five years of a window or wall air conditioner bought new
A window or wall air conditioner costing $861, held for each full year, under each method. At $861 it costs less than $1,000, so it can go into the low-value pool from the start: 18.75% of its cost in the first year, then 37.5% of what is left each year after, $754 over the five years against $579 at its own rate under diminishing value.
| Year | Diminishing value 20% | Prime cost 10% | Low-value pool |
|---|---|---|---|
| 1 | $172 | $86 | $161 |
| 2 | $138 | $86 | $263 |
| 3 | $110 | $86 | $164 |
| 4 | $88 | $86 | $102 |
| 5 | $71 | $86 | $64 |
| Five years | $579 | $430 | $754 |
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 window or wall air conditioner cost new, by year
- 2000$530
- 2010$638
- 2020$720
- 2026$861
The effective life of a window or wall 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 alone: a shelf price, its fitting not priced.
Common questions
What is the effective life of a window or wall air conditioner?
10 years, as the Commissioner of Taxation determines it for "Room units" 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 a pool pump and a pool filter.
What is the depreciation rate for a window or wall air conditioner?
20% a year under diminishing value (200% ÷ 10), taken from what is left of the value: $172 of the $861 it costs new (a shelf price, its fitting not priced) in the first full year, $71 in the fifth. Or 10% a year under prime cost (100% ÷ 10), taken from the cost: $86 in each of the first five. An item first held before 10 May 2006 takes 150% ÷ 10 under diminishing value.
Can I claim a window or wall 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 window or wall air conditioner 5 years old in good condition, about $431 of the $861 new in 2026, a value whose decline can make a capital gain or loss when it is sold or scrapped. For a window or wall 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 a window or wall air conditioner cost new?
About $861 new in 2026, from our cost database, a shelf price that leaves its fitting out, and about $638 in 2010. The other items here nearest it in price are a cooktop (about $753, with a 12-year life) and a rangehood (about $730, with a 12-year life).
Other items
- 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
- Video intercom · 10 yrs
- Garage door motor · 10 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.