Burning question on depreciation

Question from Debbie updated on 26th March 2013:

I own a rental property through an LAQC that has an old, small wood burner in the lounge. It is a large house and I previously have had two tenants (families) move out saying it is too cold in winter. The current tenants are also complaining. I am considering buying heat pumps to heat the house. Can the cost of these be claimed back? Or would they be considered a capital expense to be depreciated?

Our expert Mark Withers responded:

The cost should probably be capitalised as a new chattel asset. As a new chattel asset though the cost can be depreciated where the building can't.

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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