LUCRATIVE DEDUCTIONS AVAILABLE

All the changes announced as part of the 9th May 2017 budget have now been legislated after being passed by the Senate on the 15th November 2017.

For many property investors the new rules, outlined in Treasury Laws Amendment (housing Tax Integrity) Bill 2017, have made what was already a very complex topic a bit more difficult to try and understand.

The new rules do not affect capital works deductions at all.  The amended legislation only restricts property investors from claiming depreciation deductions for the decline in value of previously used depreciating assets (plant and equipment) with second-hand residential investment properties. (Seems very fair to me you cannot double claim on the same thing although the Government seems to do a good job on that)

An incorrect assumption some property investors have made after hearing about the changes is that they are no longer eligible to make a claim.  It is important to make note that the new legislation only applies to investors who exchange contracts on a second-hand residential property after 7.30pm on the 9th May 2017. (pretty crucial date for a lot of investors already in the system).

Even in cases where the investors are affected by these changes, there would still be thousands of dollars to be claimed, particularly on capital works deductions typically make up between 85-90 percent of the total claim.

The new legislation provides opportunities for all investors in the following scenarios as it does not impact them:

•  Investors who purchase a brand-new residential property
• Investors who entered into contracts on a residential property prior to 7.30pm on the 9th May 2017.
• Investors who add new plant and equipment assets to their property after purchase and directly incur the expense.
• Investors who purchased properties which are considered to have been substantially renovated by the previous owner
• Non-residential and commercial properties
• Any deductions that arise in the course of carrying on a business
• Any residential property held in a superannuation plan (other than self-managed super funds)
• Investors who hold residential property in corporate tax entities, including company entities
• Home Owners who turned their primary place of residence into a rental property prior to the 1st July 2017.

(Thanks to BMT tax depreciation Quantity Surveyors for this article - please call them if you need a depreciation schedule before the end of June 30th make sure you get everything that is claimable)



In all cases you should see professional advice before you start claiming anything, better to be safe that sorry.

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