From 1 April 2011 (2012 tax year) depreciation is not able to be claimed on buildings (i.e. the depreciation rate for buildings was set to 0%). Certain exceptions have been provided for example, the IRD specifically allows depreciation to be claimed on some specialised buildings (referred to as schedule 39 structures) including glasshouses, milking sheds and fowl houses amongst others.
In the case of commercial buildings purchased prior to 1 April 2011 the IRD allows 15% of a building’s tax book value to be split out as fit-out costs and be depreciated on a 2% straight line basis provided that no element of the commercial property fit-out costs have previously been depreciated as a separate asset. If fit-out costs of a commercial building have been depreciated as a separate item the option to split out 15% of the buildings tax book value is not available. Note a fit-out option is not available for residential properties.
While depreciation is not able to be claimed on residential buildings depreciation can still be claimed on chattels such as fences, carpet, blinds, appliances and so on.