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Limit for Plant and Equipment depreciation deductions

Income tax deductions for the decline in value of previously used plant and equipment in rental premises used for residential accommodation are no longer allowed. The changes are now law.

The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 received royal assent on 30 November 2017.

The changes apply from 1 July 2017 to:

  • Owners of a second-hand property with previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time.

  • Plant and equipment acquired before 1 July 2017 but not used to earn income in either the current or previous year.

  • Investors who purchase new plant and equipment will continue to be able to claim a deduction over the effective life of the asset.

  • The changes do not affect deductions that arise in the course of carrying on a business, or for:

  1. Corporate tax entities

  2. Superannuation plans other than self-managed superannuation funds

  3. Public unit trusts

  4. Managed investment trusts

  5. Unit trusts or partnerships whose members are the above listed entities.

A depreciation schedule prepared by a specialist quantity surveying firm such as BMT Tax Depreciation helps to ensure that you are maximising the cash return from your investment property each financial year.

To speak to one of our professional team please call (02) 6684 2502 or visit our website to learn more about what we do and how we can help you reach higher.

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