On the 15 November 2017, the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 was passed through Parliament. This is the most significant reform in the residential depreciation sector for the past 15 years.

The amendments limit the depreciation deductions that owners of second-hand residential properties may claim on their investment properties.

Depreciation on properties are split into two components, capital works and plant and equipment allowance.  For second hand property contracts settled after 9 May 2017, the investor can no longer claim depreciation for plant and equipment purchased by the previous owner. They can however still claim depreciation for plant and equipment if it is purchased and installed after settlement date.

This does not affect investors who purchased new / off the plan properties.

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