New depreciation legislation for Australian Property investors


In 2017 we have experienced the most drastic change to property depreciation legislation in more than 15 years. This change stems from the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 which has passed through Parliament and is now legislation. The great news is that there are still thousands of dollars to be claimed by Australian Property Investors. It’s more important now than ever to talk to a specialist Quantity Surveyor to make sure that every deduction is claimed and nothing is missed. The key points of the new legislation include: Property investors who exchanged contracts to purchase a second-hand residential investment property after 7:30pm on the 9th of May 2017 will not be able to claim depreciation deductions on existing plant and equipment assets (removable and mechanical assets). Additional assets which the owner adds to the property can be claimed as before. Capital Works Deductions (depreciation to the structure of a property including fixed assets) are unaffected and can still be claimed for all income producing properties. This usually equates to 85-90 per cent of the total construction cost and claim. Property investors who exchanged contracts to purchase a second-hand residential property prior to 7:30pm on 9th of May 2017 are unaffected and can continue to claim depreciation on plant and equipment assets as well as the qualifying building structure. Investors who purchase a brand new residential investment property (including substantially renovated properties) are unaffected and can continue to claim depreciation deductions on both the building structure as well as plant and equipment assets, regardless of when they exchange contracts. Commercial property owners and tenants are unaffected and can continue to claim depreciation deductions on both the building structure as well as plant and equipment assets. Any depreciation which is unable to be claimed immediately due to the change in legislation, can in some circumstances be claimed as a capital loss against any capital gain, reducing capital gains tax liabilities, this claim amount will be included in the BMT Capital Allowance and Tax Depreciation schedule where applicable. The expert team at BMT will be tailoring every depreciation schedule to suit an individual’s scenario in line with the new legislation, ensuring that all property depreciation and capital gains tax deductions are maximised. Talk to Australia’s leading property depreciation specialists today. Visit us online or call our expert team on 1300 728 726.

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