When you have property that loses value over time, you can claim this loss as a deduction on your taxes. This is called depreciation. Even though the property itself might be considered a capital asset, you can still claim the depreciation loss. The rule that usually stops you from claiming capital expenses as deductions doesn’t apply in this case. This means you can reduce your taxable income by the amount your property has decreased in value, even if the property is something big and expensive that you use for a long time.
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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513568.
The capital limitation does not apply to an amount of depreciation loss merely because the item of property is itself of a capital nature.
