The Federal Government has proposed adjustments to depreciation legislation in the 2017 Budget. Investors who purchase existing apartments after 9 May 2017 will be worse off in respect of depreciation benefits, which will impact cash flow.
Under
the new rules which are yet to be legislated by Parliament, investors
will be able to depreciate new plant and equipment assets within a new
property and items they add to their
property; however subsequent owners who acquire a property after 9 May 2017 will not be able to claim depreciation on existing plant and
equipment assets.
Investors
will still be able to claim qualifying capital works deductions,
including any additional capital works carried out by themselves or a
previous owner.
The
budget notes were clear that existing investments will be
grandfathered. This means that anyone who has purchased a property up
until 9 May 2017 will be able to
claim depreciation as per normal.
See also BMT blog
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