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Change in depreciation for rental propery

Depreciation claim for second-hand plant and equipment in rental property

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.

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.
The amendment means that property investors can no longer claim depreciation for plant and equipment assets, such as air conditioning units, solar panels or carpet, in second-hand residential properties (where contracts were exchanged after 7:30pm on May 9, 2017).
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JH Business Services & Taxation
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Specialist in small to medium business 
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