ATO Updates - Rental Properties

The ATO has recently announced changes to depreciation:


The changes do not affect the following:

  • Commercial property.
  • Brand new residential property.
  • Property purchased before May 9, 2017.
  • Deductions claimed on the building itself.

So, what is affected?

  • With second-hand properties purchased after May 9, 2017 (contract date), you will no longer be able to claim depreciation on the Assets:
  • Appliances, floor coverings, air con, hot water etc. (But in many cases, there is still plenty to claim on the building itself.)
  • Any Assets you buy and add yourself to the property, you will of course be able to claim.

Now, for the good news!

With these second hand properties, the depreciation you could have claimed on the Assets under the old rules can be tallied up and deducted from the profit when you sell the property. This reduces your Capital Gains Tax. But for us as your accountant to know how much we can reduce your CGT by, the Assets need to be valued when you buy the property. That’s where having a depreciation schedule prepared comes into play. Please contact our office should you require any further information or would like to have a schedule prepared.

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