Depreciation on an apartment: your unit and your share of the common property

An apartment's depreciation covers more than the walls of the unit itself. In a strata scheme the owners generally hold the common property together, so a schedule for one apartment includes its share of the building's shared structure and equipment as well as the unit's own.

The body that runs the scheme, holds its records and levies the owners has a different name in each state: an owners corporation in New South Wales, Victoria and the Australian Capital Territory, a body corporate in Queensland, Tasmania and the Northern Territory, a strata company in Western Australia and a strata corporation in South Australia. Whatever its name, it does not claim the building's deductions for the owners; each owner claims their own share.

The capital works deduction (2.5% a year of the construction cost, for construction begun after 15 September 1987) covers the unit and its share of the common structure: lobbies and corridors, stairs and lift shafts, the car park, the roof. Apartment buildings cost considerably more to build per square metre of each unit than houses do, because of their concrete frames, basements, lifts and shared areas, so an apartment's building deductions are often larger than its size suggests. Our state pages price each by the year it was built, an apartment as one in a high-rise and a unit as one in a low-rise block: for instance an apartment in New South Wales, a unit in Queensland and a unit in the Northern Territory.

Lifts, fire hose reels and detection systems, intercoms and access control, CCTV, car park doors and their motors, and pool and gym equipment are plant. Each owner's share is usually taken in proportion to the lot's unit entitlement on the strata plan: a lot with 25 of 1,000 entitlements carries 2.5% of each item.

Because each owner's interest is valued on its own, a share of an expensive item can be small enough for the low-value pool. The same second-hand rules apply as to the unit's own plant: an apartment bought new carries new plant, an established one previously used plant.

The contract of sale, the strata plan's schedule of unit entitlement, and anything that lists the building's facilities (the developer's inclusions, the agent's listing, the strata manager's asset register). Arrangements differ between schemes and states, so where a share is uncertain the report says how it was worked out. Speak to your tax agent about your own circumstances.