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At tax time, wear and tear or, more specifically, depreciation is a property investor’s best friend.

As a property gets older and items within it wear out, their value depreciates. The Australian Tax Office (ATO) governs legislation that allows owners of an income-producing property to claim a tax deduction for this wear and tear. Capital works deductions can be claimed on the building’s structure and items considered permanently fixed to the property, while depreciation can be claimed on the plant and equipment assets contained within it.