- The changes don’t apply to commercial or brand-new residential properties.
- The changes don’t apply to building depreciation.
- The changes do apply to used residential investment properties purchased after 7:30 pm on 9 May 2017. ‘Purchase’ is generally defined as the date you put down a deposit on your investment property and contracts are signed and exchanged. So if you purchased a residential property before this date, you won’t be affected.
- If you buy a second-hand investment property, you’ll no longer be eligible to claim tangible depreciating assets, also known as ‘plant and equipment.’ But, in many cases, there’s still plenty to claim on the building itself. You may also claim any assets that you purchase and add to the property after purchase.
We recently blogged about the Federal Government’s 2017/18 Budget and what changes it brought to depreciation rules on investment properties. At the time of writing, the government was still finalising the legislation. This month, the draft legislation was released and we’re pleased to say that it’s cleared up some confusion for investors. To recap, here’s the key information that you need to know: