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Do you get more depreciation on a new or old property?
After the depreciation tax laws changes in 2017 – you definitely get more depreciation on a newer property.
The changes to depreciation in 2017 meant that you could no longer claim depreciation on second-hand Plant & Equipment assets. This has led to brand-new property having much higher depreciation claims.
Also, construction costs have historically risen over the years. So a house built in 1990 would have a lower construction cost than an equivalent one built in 2010, meaning the depreciation claim would be lower.
Since the 2017 Federal Budget changes, you are still able to claim both the Plant & Equipment and Building Allowance deductions on brand new property.
This means you will be entitled to the maximum depreciation claims, provided the house remains as an income-producing asset.
Compared to an older property, where you are not entitled to claim deductions on the previously used Plant & Equipment, the difference in deductions could be well into the thousands.
Do I need a Quantity Surveyor or an Accountant?
You need a Quantity Surveyor to prepare your depreciation schedule. The ATO has stated that a Quantity Surveyor is eligible to estimate building costs where they are not known.
Washington Brown have prepared depreciation schedules for hundreds of thousands of properties. Start claiming deductions and request a free, online quote.
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New Property Depreciation Articles:
In 2017, the Australian Government significantly changed how depreciation can be claimed on second-hand property. And if you ask me, the new legislation is sloppy, at best! You can no longer claim depreciation on “previously used” residential assets such as carpet, ovens, dishwashers, etc. You can learn more about the changes to the depreciation law […]
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There is a common misconception in the property market that you cannot claim depreciation on old properties. This is wrong, and I can prove it! The origin of this myth centres on the fact that you cannot claim building depreciation on residential properties where the construction commencement date is before 1987. This is a true […]
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9 Ways to Cut Tax Bills Through Depreciation Firstly, what is property depreciation? Well, just like you claim the wear and tear of your car against your taxable income or the wear and tear of the desk in your office, you can claim the wear and tear of your property against your taxable income. But […]
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If you’ve engaged a builder, bought a house and land package, or constructed a brand new home yourself, then there is some great news! The 2017 Budget changes to depreciation don’t affect you (provided you never lived in the house yourself); and, We can generally complete your report at a lower fee, as […]
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Some people prefer to invest in brand-new properties while others opt for older properties that they can renovate and resell for profit. So, which is the better investment strategy? New vs old property? Depreciating New Properties / Houses Let’s have a look at some of the pros and cons of buying brand-new properties and almost-new […]
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What is Negative Gearing Investment Property? Put simply, negative gearing is a tax benefit offered to investors on their borrowing costs. If your borrowing costs exceed the revenue gained from your investment, you are entitled to claim those losses against your total income. The benefit of gearing is that it allows you to own investments […]
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