In November 2017, the Federal Government made changes to the way investors can claim depreciation for plant and equipment assets in residential property.

These changes affect previously used plant and equipment assets (the easily removable items within an investment property such as hot water systems, smoke alarms and curtains) found in second-hand or previously owner-occupied residential investment properties.

We still found affected clients an average first full financial year claim of $5,625 last year.

What do the changes mean?

  • If you exchanged contracts on a second-hand residential investment property after 7:30pm on 9 May 2017, you can no longer claim depreciation for any existing plant and equipment assets within the property

You can still claim depreciation for:

  • New assets you install once the property is income producing
  • Qualifying capital works deductions relating to the building’s structure and any items permanently fixed to the property, which typically make up between 85 and 90 per cent of a depreciation claim
  • Commercial property

Hear Bradley Beer, BMT CEO, explain the changes and how they affect investors.

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Thousands to be claimed

Although there are new rules affecting second-hand residential properties, the good news is that there are still thousands of dollars to be claimed.

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Essential facts: 2017 Budget changes and property depreciation.

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Plenty of lucrative deductions still available.

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FAQs about tax depreciation

FAQs about tax depreciation

What happened to the depreciation that was claimable?

The plant and equipment depreciation claimable is still there for the assets, however instead of claiming the depreciation as a deduction each financial year, these amounts will get added to a capital loss schedule that your accountant can use when adjusting your Capital Gains Tax liabilities when you either sell your property or dispose of the assets.

Yes. Capital works deductions, which make up about 85 – 90% of a depreciation claim are still available, and ready to be claimed by many residential investment property owners who own a second-hand property.

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Learn more about depreciation legislation