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Buildings and structures DEP62

This determination results from the depreciation changes in the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006. This legislation changed the methods for calculating depreciation rates for items of depreciable property. The depreciation rates for certain items that are not buildings, acquired on or after 1 April 2005 are calculated using the double declining balance method (i.e. the diminishing value rate), with a straight-line equivalent. The depreciation rate for buildings, acquired on or after 19 May 2005 is calculated using a straight-line formula, with a diminishing value equivalent.

As a result of these legislative amendments, this determination amends the "Buildings and Structures (not specified)" asset class in the "Buildings and Structures" asset category in Determination DEP1: Tax Depreciation Rates General Determination Number 1. This is because the buildings and structures economic rates are calculated using different provisions and also because not all structures are buildings.

There are two parts to this determination. The first part applies to structures and to buildings acquired before 19 May 2005. It separates out structures from the "Buildings and structures (not specified)" asset class to create two separate classes: the "Buildings (not specified) (acquired before 19 May 2005)" asset class and the "Structures (not specified)" asset class. The second part of the determination inserts a new asset class: the "Buildings (not specified) (acquired on or after 19 May 2005)" asset class.

Tax Depreciation Rates General Determination Number 62

This determination may be cited as "Determination DEP62: Tax Depreciation Rates General Determination Number 62".

1.   Application

This determination applies to taxpayers who own items of depreciable property of the kind referred to in the asset classes listed below.

There are two parts to this determination. Part A of the determination applies to structures and to buildings acquired before 19 May 2005. Part B of the determination applies to buildings acquired on or after 19 May 2005.

2.   Determination

Pursuant to section 91AAF of the Tax Administration Act 1994 I hereby amend Determination DEP1: Tax Depreciation Rates General Determination Number 1 (as previously amended) by:

Part A

  • Amending the "Buildings and Structures (not specified)" asset class in the "Buildings and Structures" asset category by removing the words "and structures" and changing the asset class as listed below:

    Asset class Estimated Useful life (years) DV banded depn rated (%) SL equiv. banded depn rate (%)
    Buildings (not specified) (acquired before 19 May 2005)
    50
    4
    3


  • Inserting into the "Buildings and Structures" asset category the general asset class, estimated useful life, and diminishing value and straight-line depreciation rates listed below:

    Asset class Estimated Useful life (years) DV banded depn rated (%) SL equiv. banded depn rate (%)
    Structures (not specified)
    50
    4
    3

Part B

  • Inserting into the "Buildings and Structures" asset category the general asset class, estimated useful life, and diminishing value and straight-line depreciation rates listed below:

    Asset class Estimated Useful life (years) DV banded depn rated (%) SL equiv. banded depn rate (%)
    Buildings (not specified) (acquired on or after 19 May 2005)
    50
    3
    2

3.   Interpretation

In this determination, unless the context otherwise requires, expressions have the same meaning as in the Income Tax Act 2004.

This determination is signed by me on the 27th day of June 2007.

 

Susan Price
Senior Tax Counsel, Public Rulings