If you have capital works that you use to produce assessable income, ask yourself - can I use the capital works deduction or other special rules?

Capital works used to produce income, include buildings and improvements to buildings, are written off over a longer period than other depreciating assets.

The capital works deduction is available for:

• buildings or extensions, alterations or improvements to a building
• alterations and improvements to a leased building and leasehold improvements
• structural improvements such as sealed driveways, fences and retaining walls
• earthworks for environmental protection, such as embankments.

Deduction rates of 2.5% or 4.0% apply, depending on the date on which construction began, the type of capital work, and how it is used.

Note: the cost of land a capital work is on can't be written off and its cost isn't deductible.