Can you claim on new and old property?
The laws have recently changed and there is a big difference between claiming depreciation on new property compared to second-hand property.
If you acquired a second-hand residential property from 10 May 2017, which contains ‘previously used’ depreciating assets, you will no longer be able to claim depreciation on those assets.
This refers to the Plant and Equipment portion of a depreciation schedule, including: Ovens, Dishwashers, Lights, Air-conditioners. Televisions, Carpets, Lounge suites, Blinds, Common property plant and equipment items.
However, the Building Allowance, or claims on the structure of the building, has not changed at all. You will still need a depreciation schedule to calculate these deductions, which typically accounts for 85% of the overall construction cost. The structure includes things like brickwork and concrete so there’s no change to that.
Investors of brand-new properties can carry on claiming full depreciation on both the Plant and Equipment and Building Allowance.
These Govt changes were made because property investors were over-claiming on second-hand depreciable items.
Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost.
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
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