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RESTRICTION ON DEPRECIATION DEDUCTIONS

From 1 July 2017, the Government will limit “plant and equipment” depreciation deductions to outlays actually incurred by investors in residential real estate properties.

The Budget Papers state that plant and equipment items are usually mechanical fixtures or those which can be “easily” removed from a property such as dishwashers and ceiling fans.

WHAT THIS MEANS FOR YOU ?

Investors who purchase plant and equipment for their residential investment property after 9 May 2017 will be able to claim a deduction over the effective life of the asset. However, subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by a previous owner of that property.