On 15 November 2017, Parliament passed the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, with the Bill now legislation.
The new legislation means owners of non-new residential properties, for contracts exchanged after 7.30pm on 9 May 2017, will be ineligible to claim depreciation on plant and equipment assets, such as air-conditioning units, solar panels or carpet.
Investors who made a purchase prior to this date can continue to claim depreciation deductions as they have previously. In addition, those who purchase brand new residential properties, or commercial premises, are also unaffected.
Happily, there are still thousands of dollars able to be claimed by Australian property investors, as there has been no change to other allowable deductions, such as for the structure of a building and fixed assets such as doors, basins, windows and retaining walls, which make up around 85 to 90 per cent of an investor’s total claimable amount.
The legislation also does not affect plant and equipment purchases made after the purchase of the property, i.e. those for which the owner has directly incurred an expense. The new legislation only relates to items which were included with the property at the time of purchase.
The rules relating to depreciation are complex, which is why it is always important to work with a specialist quantity surveyor to ensure that all deductions are identified and claimed correctly under the new legislation. They will prepare a tailored depreciation schedule to suit each individual’s property investment scenario, ensuring that all deductions are maximised.
BMT – Australia’s largest tax depreciation company – has prepared a short video to explain the new legislation, which you can view here.
At Pure Leasing Central, we’re more than happy to help you navigate the process of maximising your depreciation deductions, so please don’t hesitate to call your Property Manager if you have any questions.