How does depreciation work for industrial property?

For an owner of industrial property, depreciation is a non-cash deduction that can meaningfully affect the after-tax return on holding the asset, which is part of why a professional owner values a detailed schedule of what's depreciable and at what rate. Capital works generally covers the building shell and structural elements; plant and equipment covers a narrower set of items that are more mechanical or removable in nature, though the boundary and eligible rates are matters of current tax law rather than general knowledge.

This matters differently depending on who's holding the property. An owner-occupier who converts to a tenant through a sale and leaseback stops claiming property depreciation directly, because they no longer own the building — a consideration worth understanding alongside the capital they release. A long-term investor, by contrast, typically holds and manages depreciation schedules as a routine part of owning income-producing property.

Depreciation rules, rates and eligible categories are set by tax legislation and change over time, and how they apply depends on the specific property and the owner's circumstances. This is general information only, not tax advice — anyone relying on depreciation outcomes should get current advice from a qualified accountant or quantity surveyor.