You can deduct the decline in value of depreciating assets, which are capital assets you either acquired when you purchased your property or subsequently purchased for your property. Generally speaking, these assets must be used in gaining or producing your assessable income.
Depreciating assets have a limited lifespan and are expected to decline in value over time. Furniture, stoves, washing machines, and TVs are all examples of depreciating assets. This deduction is particularly applicable to owners of residential rental properties.
Generally, you deduct the decline in value of depreciating assets over a number of years. However, in certain circumstances, the decline in value may be immediately deductible. In order for this to be the case, the asset must:
- Cost less than $300
- Be used mainly to produce assessable income (that is not income from carrying on a business)
- Not be a part of a set of assets that together cost more than $300 or not one of a number of identical items that together cost more than $300