Budget Changes to Depreciation

Budget Changes to Depreciation

The 6 must-know takeaways from these budget changes:

  1. For residential property, you will only be able to claim depreciation on plant and equipment items (ovens, dishwashers etc.) when you buy a brand new property.
  2.  You will still be able to claim the building allowance (bricks, concrete etc.) on any residential property built after 1987.
  3. If you bought a property built prior to The Budget on the 9th of May, 2017 when the changes were announced, you are not affected in the slightest.
  4. There is no change at all to commercial or other non-residential property.
  5. If you personally buy any item for your property after the settlement you can still claim the depreciation on that particular item.
  6. Perhaps the most interesting point: Whilst investors purchasing second-hand property can now no longer claim depreciation on the existing plant and equipment, they will have the benefit of paying less capital gains tax when they sell the property, by claiming any unclaimed depreciation as a capital loss.

Moving forward, property investors will have a choice of ordering a building allowance report only, a CGT schedule or a combination, from Washington Brown.

Depreciation Calculator