Depreciation, quickly
Depreciation splits into the building itself (Division 43) and the plant and equipment inside it (Division 40) — and the rules for claiming each differ, especially on a second-hand property.
Two different sets of rules cover depreciation on a rental property, and they don't work the same way.
Division 43 (capital works) covers the building structure itself — claimed at 2.5% a year over 40 years for eligible properties built after 15 September 1987.
Division 40 (plant and equipment) covers items like ovens, carpet and air conditioners, each depreciated over its own effective life. This is the division where second-hand rules bite: since 2017, deductions on previously-used plant and equipment in a second-hand residential property are generally restricted. New assets and new builds aren't affected.
Buying an established rental rather than a new build changes what you can claim here, which is worth knowing before you factor depreciation into a purchase decision. See the second-hand depreciation rule for the detail.
BrickTrack helps you organise your property data so you can work more effectively with your accountant. It is not tax advice.