In this month’s QS Corner, the budget made some big changes to depreciation…
In an attempt to “reduce pressure on housing affordability” the Government has announced dramatic changes to the way depreciation is claimed on property.
So what are the changes?
The government will limit plant and equipment depreciation deductions to outlays actually incurred by investors.
1. Any existing investment properties purchased (contract exchange date) prior to May 9, 2017, are not affected.
2. Commercial, industrial and other non-residential properties are not affected.
3. Capital works deductions have not been affected. This means you will still be able to claim depreciation on the structure of the building provided it was built after the September 16, 1987.
Will you still need a Quantity Surveyors report in the future?
Yes, you will, because these changes only relate to the plant and equipment of the building, not the capital works deduction ie, the structure of the building.
Now to put this into perspective, the plant and equipment items only represent approx 10% of the overall construction cost, so there’s still 90% left to claim.
It’s now more important than ever to get a depreciation schedule, so don’t delay.
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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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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
