Updated guidance on deductions available for an investment property

The ATO has updated its guidance on depreciating assets for investment properties. If an individual purchased their rental property at or after 7.30pm on 9 May 2017, they may be impacted by the changes to legislation for depreciating assets.

These changes apply from 1 July 2017.

Individuals can no longer claim deductions for second-hand or used depreciating assets, whether they are bought with the property or separately. They also cannot claim depreciation deductions if they have used the asset for private purposes before installing it in their rental property.

They can still claim deductions for new depreciating assets.

If they owned a rental property, or entered into a contract to purchase your rental property before 7.30pm on 9 May 2017, they can continue to claim deductions for decline in value of the depreciating assets that were in the rental property before that date.

It doesn’t matter whether the depreciating asset installed in the property was new or used, or whether the property was new or not.