Every single hotel, no matter the type or size, needs to have adequate safety equipment. Not only does it safeguard the hotel’s patrons and staff members, but it also ensures the hotel operator complies with government and workplace safety regulations.

These non-negotiables don’t come cheap, especially for the larger hotels that have multiple areas  that require equipment. But there is one tax deduction that can make things a lot more affordable come tax time – depreciation.

Breaking down the types of hotel safety equipment

Hotel safety equipment can be broken down into three main categories:

• Fire safety: This includes equipment like smoke detectors, alarms, switchboards, fire extinguishers and sprinkler systems.
• Health: This is the equipment used for medical emergencies and for general health and safety, including first aid kits, defibrillators, accident prevention signs, carbon monoxide detectors and air filters.
• Security: This includes the equipment to keep staff and patrons secure, such as security cameras, alarms and motion detectors.

Can it be depreciated?

Safety equipment, like most other assets that are used to produce income, can be depreciated. How exactly it is depreciated depends of the specific asset.

Those that are considered to be easily removable or mechanical in nature are classed as plant and equipment assets. This includes assets like fire extinguishers, first aid kits and security cameras just to name a few.

Plant and equipment assets are depreciated at a rate based on their effective life. For example, a digital CCTV camera in a hotel has an effective life of four years which means its prime cost depreciation rate is 25 per cent.

Other assets that are structural or fixed to the property are classed as capital works. These assets are depreciated at a fixed rate.

For traveller accommodation, this is a fixed rate of four per cent over twenty-five years. An example of hotel safety equipment that falls under capital works is indoor fire safety sprinkler systems.

What about safety equipment maintenance costs?

Maintaining safety equipment is just as important as having it in place. For example, smoke alarms needs to be maintained and checked by a licensed professional on a regular basis.

The good news for hotel property owners and operators is that any maintenance cost is immediately tax deductible in the same year the expense was made.

How can depreciation be claimed on hotel safety equipment?

To claim depreciation deductions on any assets, from safety equipment to furniture and walls or doors, a tax depreciation schedule must be used.

A tax depreciation schedule is a type of report that outlines all depreciation deductions available from a property and its fit out. If the owner of the hotel building and the actual business operating from it are different parties, two schedules will need to be prepared to ensure everyone claims what they are entitled to.

BMT Tax Depreciation has been preparing tax depreciation schedules for over 20 years. They specialise in both residential and commercial property, including hotels of all shapes and sizes.

Hotel operators and property owners who want an obligation-free depreciation estimate can contact BMT on 1300 728 726 or Request a Quote today.

The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.

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