Changes to Rental Property Deductions 2018

Recent budget announcements and legislation changes to rental property deductions in 2018 have significantly impacted the deductions previously available for property investors.

From 1 July 2017, owners of self-managed residential investment, rental properties will be unable to claim a tax deduction for travel expenses, nor can any such expense be included in the cost base of the property.

The other major change to investment properties is the limitation of depreciation deductions on existing plant and equipment of residential properties. From 1 July 2017, depreciation on existing or used plant and equipment acquired on or after 9 May 2017 (purchase contract date of property) will not be deductible. Any assets held prior to 9 May 2017, or properties purchased before that date, will still be depreciable as the old rules have been grandfathered.

The good news is that any new plant and equipment purchased can still be depreciated. Brand new residential rental properties are also allowed to claim depreciation on plant and equipment as the assets are not second-hand.

Depreciation of plant and equipment for commercial properties is unaffected by the new legislation.

To ensure you don’t miss out on rental property deductions, CONTACT US TODAY to discuss changes to rental property deductions 2018.