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Understanding changes to depreciation rules

2 August 2018

One of the major changes affecting property investors in 2018 has involved depreciation claims on second-hand residential properties.
 
Previously, the depreciation in the value of fittings and fixtures has been able to be claimed against an investor’s taxable income. This was applicable for all investment properties.
 
Following new rules outlined in the Federal Government’s 2017-18 Budget, investors are no longer able to claim depreciation on fittings and fixtures that were inherited from the previous owner in second-hand residential properties. This covers a range of items, such as air conditioners, solar panels, carpets, curtains, etc. These changes are intended to prevent the double-dipping of depreciation claims across different owners of the same property following a sale.
 
Importantly, the new changes do not affect new fittings and furnishings that an investor installs once they have purchased a property or capital works deductions for the structural component of a property. They also do not apply to properties that were settled prior to the 2017 Budget announcement, at 7.30pm on May 9 2017.
 
You can read more about these changes to property depreciation claims here

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