Immediate deduction for certain non-business depreciating assets costing $300 or less

The decline in value of certain depreciating assets costing $300 or less is their cost. This means you get an immediate deduction for the cost of the asset to the extent that you use it for a taxable purpose during the income year in which the deduction is available.

The immediate deduction is available if all of the following tests are met in relation to the asset:

    • it cost $300 or less
    • you used it mainly for the purpose of producing assessable income that was not income from carrying on a business (for example, rental income where your rental activities did not amount to the carrying on of a business)
    • it was not part of a set of assets costing more than $300 that you started to hold in the income year, and
    • it was not one of a number of identical, or substantially identical, assets that you started to hold in the income year that together cost more than $300.
    • If you hold an asset jointly with others and the cost of your interest in the asset is $300 or less, you can claim the immediate deduction even though the depreciating asset in which you have an interest cost more than $300; see Partners carrying on a rental property business.

Examples: immediate deduction

Mark purchased a toaster for his rental property at a cost of $70. He can claim an immediate deduction as he uses the toaster to produce assessable income, provided he is not carrying on a business from the rental activity.

Example: No immediate deduction

Penny is buying a set of four identical dining room chairs costing $90 each for her rental property. She cannot claim an immediate deduction for any of these because they are identical, or substantially identical, and the total cost is more than $300.

For more information about immediate deductions for depreciating assets costing $300 or less, see the Guide to depreciating assets 2014.

End of further information

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