Claiming Depreciation On Buildings

The IRD issued interpretation statement. Explaining the depreciation on building. IS 22/04: Claiming depreciation on buildings

1. In 2020, depreciation deductions were reintroduced for non-residential buildings used, or available for use, for deriving income or carrying on a business for that purpose. For these buildings, depreciation can be claimed for the 2020-21 and later income years. The depreciation rate for residential buildings remains at 0%.
2. Whether a building is a non-residential building or a residential building is determined based on the building’s predominant use. A building owner cannot apportion a mixed-use building for depreciation purposes. Because the test is based on the building’s predominant use, it is effectively an all-or-nothing test.

*The above article is a high-level explanation of the methods of calculation, and there may be other technicalities/rules that are applicable. The complexity of the calculations can also vary. Please reach out to us if you have specific questions regarding your situation.

Please note that the above does not constitute specific tax advice and only intends to be a general advice. If you require specific advice related to your situation, please reach out to our tax consultant using the ‘contact us’ option.

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