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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 7: What is not depreciable property?

You could also call this:

"Things that do not lose value over time are not depreciable property"

Illustration for Income Tax Act 2007

You need to know what is not depreciable property. Depreciable property is a term used in the Income Tax Act 2007. It does not include land, except for some buildings and improvements listed in schedule 13. You should look at the list to see what is not depreciable property. It includes trading stock, livestock, and financial arrangements. It also includes property that will not decline in value. Some other things are not depreciable property, like a lease of land with a perpetual right of renewal. You can choose to treat some property as not depreciable under section EE 8 or section EE 38. If someone else can claim a deduction for the cost of a property, it is not depreciable property for you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514512.

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Topics:
Money and consumer rights > Taxes
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EE 6: What is depreciable property?, or

"Property that loses value over time when used for business or taxable activities"

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EE 8: Election that property not be depreciable, or

"Choosing not to claim depreciation on property"

Part ETiming and quantifying rules
Depreciation

EE 7What is not depreciable property?

  1. The following property is not depreciable property:

  2. land other than depreciable intangible property, although buildings, fixtures, and the improvements listed in schedule 13 (Depreciable land improvements) are depreciable property if they are described by section EE 6(1):
    1. a lease of land with a perpetual right of renewal:
      1. trading stock:
        1. livestock to which subpart EC (Valuation of livestock) applies:
          1. financial arrangements:
            1. excepted financial arrangements other than depreciable intangible property:
              1. property that will not decline in value, as far as its owner is concerned, because, when they dispose of it, they have a right to be compensated for any decline in its value:
                1. property that is a piece of an item of depreciable property that is an aircraft or an aircraft engine, if the expenditure on the piece is treated under section DW 5(8) (Aircraft operators: aircraft engines and aircraft engine overhauls) as being expenditure incurred in carrying out an aircraft engine overhaul:
                  1. a utilities distribution network, to the extent to which it is treated as an item of property separate from the relevant utilities distribution assets:
                    1. property that its owner chooses, under section EE 8, to treat as not depreciable:
                      1. property that its owner chooses, under section EE 38, to deal with under that section:
                        1. property for whose cost a person other than the property’s owner is allowed a deduction:
                          1. property for whose cost a person is allowed a deduction under a provision of this Act outside this subpart or under a provision of an earlier Act.

                            Compare
                            Notes
                            • Section EE 7(a): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 46(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section EE 7(ab): inserted, on , by section 65(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                            • Section EE 7(c): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 65(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                            • Section EE 7(e): replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 46(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section EE 7(fb): inserted, on (applying for the 2017–18 and later income years), by section 59(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                            • Section EE 7(fc): inserted (with effect on 1 April 2008), on , by section 51(1) (and see section 51(3) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                            • Section EE 7(j): amended, on (with effect on 1 April 2014), by section 66 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                            • Section EE 7 list of defined terms aircraft engine: inserted, on , by section 59(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                            • Section EE 7 list of defined terms aircraft engine overhaul: inserted, on , by section 59(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                            • Section EE 7 list of defined terms building: inserted (with effect on 30 July 2009), on , by section 84 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                            • Section EE 7 list of defined terms depreciable intangible property: inserted (with effect on 1 April 2008), on , by section 46(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section EE 7 list of defined terms land: inserted (with effect on 1 April 2008), on , by section 46(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section EE 7 list of defined terms utilities distribution asset: inserted (with effect on 1 April 2008), on , by section 51(2) (and see section 51(3) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                            • Section EE 7 list of defined terms utilities distribution network: inserted (with effect on 1 April 2008), on , by section 51(2) (and see section 51(3) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).