Plant and equipment depreciation changes for residential property

 

Deductions for depreciation of residential property fixtures will only be allowable for expenses actually outlaid by an investor, effective 1 July 2017. This budget measure is addressing concerns that some plant and equipment items are being claimed by successive investors in excess of their actual value.

Prior to 9 May 2017, an allowable deduction for depreciation is available when an investor purchases fixtures as part of a residential property. Usually the deduction becomes available with the release of a quantity surveyors report. Deductions for capital works of Division 43 are not affected.

Special rules to the amendments apply for investors that purchase new or substantially renovate a property for rent.

Source: Treasury Laws Amendment (Housing Tax Integrity) Bill 2017; Budget paper No 2, p 30