Asset Reports Proposed Legislation Changes
We sat down with Kristian Jeromson from Asset Reports recently to get some further insight around the proposed changes announced last week in the Federal Budget affecting depreciation and Negative Gearing, which are designed to restrict the tax deductions available when an investor buys an established residential property. Anyone who buys an established property for investment purposes will no longer be able to claim depreciation on the plant & equipment – Division 40 (fixtures & fittings) that comes with the property, including in strata common areas. It is designed to prevent ‘double-dipping’ by all successive owners of the property claiming depreciation on the same pieces of plant & equipment. Brand new properties and Commercial premises are exempt.
This move by the Federal Government was unforeseen by the market and caught everyone off guard. It sends a strong message that both the Liberal and Labor parties are targeting investors in the war on housing affordability. While this is not good news for new investors entering the market existing investment property owners are in luck, the proposed changes won’t affect people who already own rental properties.
Now is a good time to ensure all eligible property owners have a Tax Depreciation Schedule in place to take advantage of the tax deductions that new investors won’t be entitled to. Asset Reports provide Preliminary Depreciation Schedule estimates at no cost, which will give you a good indication of what’s available to depreciate in your investment and whether a full report is necessary. Please contact Kim Coffey on 0409882806 or email firstname.lastname@example.org to arrange.
In response to the proposed Budget changes, Asset Reports have reduced their price for Residential properties to $615 inc GST until 31 July 2017 to encourage all of HERE Property investment owners to maximise their returns.