Income tax deductions for the decline in value of previously used plant and equipment in rental premises used for residential accommodation are no longer allowed. The changes are now law.
| What is plant and equipment ?
Plant and equipment assets are items which are considered by the Australian Taxation Office to be easily removable from the property. Residential Property:
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The changes apply from 1 July 2017 to:
- previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time
- plant and equipment acquired before 1 July 2017 but not used to earn income in either the current or previous year.
Investors who purchase new plant and equipment will continue to be able to claim a deduction over the effective life of the asset.
The changes do not affect deductions that arise in the course of carrying on a business, or for:
- corporate tax entities
- superannuation plans other than self-managed superannuation funds
- public unit trusts
- managed investment trusts
- unit trusts or partnerships whose members are the above listed entities.