Private ruling: Deductions - depreciation
Date of advice: 19 March 2026
Published: 11 May 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is a staff accommodation structure fabricated onsite and then relocated to a site on the farming property considered a chattel for the purposes of Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The accommodation structure will not be fixed to the ground and can be easily removed or relocated. It is accepted that the accommodation structure will be a chattel and qualify as an article and does not fall within any of the exceptions of depreciating assets. Further information can be found in Taxation Determination TD 97/24: Income tax: what types of accommodation units used in a caravan/tourist park business can a taxpayer depreciate under section 42-15 of the Income Tax Assessment Act 1997 ('the Act') and what depreciation rates should the taxpayer use? | Q2: Are you entitled to a deduction for depreciation under Division 40 of the ITAA 1997 if the staff accommodation structure is located on land where the land is primarily zoned for residential purposes? | A2: Yes. You intend to use the accommodation structure solely for the taxable purpose of producing assessable income in your primary production business by housing employees. Per the above, you will be entitled to a deduction for depreciation under Division 40 of the ITAA 1997 for the structure that is located on land that is primarily zoned for residential purposes.

Relevant facts and circumstances: You operate a primary production business across a number of separate holdings. You are proposing to install a new transportable accommodation structure either: • located on a land holding used by the primary production business, and/or • on a parcel of land where the land is primarily zoned for residential purposes. The structure will either be purchased from a manufacturer or fabricated onsite. The accommodation structure will be used for the sole purpose of providing accommodation for workers engaged by the business. The structure will be constructed on steel framed chassis and will sit on removable concrete blocks placed on the ground. The structure will have the ability to be removed and relocated elsewhere by specialised transport vehicles. The structures do not have wheels and cannot be towed.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 40-25 | Income Tax Assessment Act 1997 section 40-30 | Income Tax Assessment Act 1997 section 40-45