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.