Grandfathering means existing arrangements may continue under previous rules even after new rules begin. This is important because many investors already own residential rental properties and are worried that their current deductions will immediately disappear.
Investors should check when the property was acquired, whether there was a signed contract before the relevant cut-off, whether the property is residential or commercial, whether the ownership structure changes, whether the property is transferred or inherited, and whether the loan is refinanced or the property is sold and replaced.
Grandfathering may protect existing arrangements, but investors should not assume every change is safe. Ownership changes and restructures can create tax consequences. A transfer between spouses, a change in trust structure, or a refinance to a different entity could trigger a re-test under the new rules.
Koste role is to help investors keep better property records, including depreciation schedules, capital works records and renovation details.
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