WHAT PROPERTY INVESTORS NEED TO KNOW ABOUT DEPRECIATION CHANGES
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The official explanation is a little confusing and complicated.
And that’s why we decided to write this page, to explain in simple and straightforward terms how these changes affect property investors and your ability to make claims.
Here are the changes you need to know about…
In a nutshell, the proposed changes only relate to residential property. Commercial, industrial, retail and other non-residential properties are not affected in the slightest.
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.
You CAN continue to claim depreciation on both building structure and assets if…
You CANNOT claim depreciation on plant and equipment if…
The Good News: If You CANNOT claim depreciation you can STILL pay less Capital Gains Tax when you sell your property.
Although you can’t claim depreciation on plant and equipment when you purchase a second hand property, you are allowed to offset against Capital Gains Tax. The offset will be the amount of the unclaimed depreciation that you would’ve been able to claim in the past, you now simply claim that as capital loss when you sell the property or remove the item.
Here’s what you need to know about.
If you’re thinking about buying, selling or renovating an investment property, then here are a few options you could take to protect your investment while maximising your tax return.