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Investors invited to consult on budget changes

18 July 2017 Tim Neary

The federal government has released draft legislation that provides investors the opportunity to have their say around proposed depreciation deduction changes announced earlier in this year’s budget.


Following the changes announced in the budget, it suggests investors of new properties and those who complete substantial renovations or purchase properties off-the-plan will not be affected by the changes. It also advises that amendments to deductions for plant and equipment assets will not affect those carrying on a business, corporate tax entities or those who hold a property in a large unit trust.

CEO of BMT Tax Depreciation Bradley Beer said the draft legislation provides clarification for property investors around the proposed new rules.

He also said it makes right to any unfair prejudice investors might have suffered from, given that capital works deductions usually make up the largest part of a property investor’s depreciation claim.

“Those who operate a business from home will still be able to continue claiming plant and equipment depreciation on assets which are used to produce an income for the business,” he said.

“Owners of secondhand residential properties will still be able to claim a capital works deduction for the structural element of a building, including fixed assets, if the building was constructed after 1987.”

Mr Beer said investors who exchanged properties before 9 May this year will still be able to claim depreciation as normal.

Public consultation on the draft legislation is open until 10 August.

Investors who purchased secondhand residential properties after the 9 May will only be able to claim depreciation for plant and equipment assets that they spend money on themselves.

Investors invited to consult on budget changes
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