We recently wrote an article about one of the most significant changes to property depreciation legislation in more than 15 years.
On Wednesday 15th November, Parliament passed the Treasury Laws Amendment [Housing Tax Integrity] Bill 2017 with the Bill now legislation.
What this new legislation means is anyone who buys a second-hand [established] residential property after May 9th 2017 will be ineligible to claim depreciation on existing plant & equipment assets – such as air conditioning units, solar panels or carpet.
[Note: you will still be able to claim depreciation for any new plant & equipment assets you purchase and directly incur an expense on.]
The good news is the capital works deductions remain unchanged in the new legislation so there are still thousands of dollars to be claimed by property investors. These deductions usually make up the bulk of an investor’s total claimable amount and include the structure of a building and fixed assets such as doors, basins, windows or retaining walls.
Existing investors will breathe a sigh of relief also with the previous depreciation legislation being grandfathered in – this means investors who already made a purchase prior to this date can continue to claim depreciation deductions as per before.
Finally, Investors who purchase brand new residential properties are unaffected by the new legislation and will be eligible to claim depreciation on existing plant & equipment assets within the property.
As a result, we wouldn’t be surprised if more investors start shifting their focus to buying and investing in brand new property – such as house & land packages or newly built developer stock.
We compiled a list of 8 reasons why investors might want to consider buying new property – you can read them all here
To read more about the new depreciation legislation and how this applies to a range of property investment scenarios, BMT Quantity Surveyors have compiled a comprehensive white paper that you can download for free here – Essential Facts: 2017 Budget changes and property depreciation.
It’s more important than ever to work with a specialist Quantity Surveyor to ensure that all deductions are identified and claimed correctly under the new legislation.
For more info please don’t hesitate to contact us on 08 8451 1500
Sam, Matt & Andy
Adelaide Finance Brokers + a lot more…
PS. We’ve created a property investment coaching program to help guide you through the process of building a profitable property portfolio – for more info click here