The 9 May 2017 rule change is one of the most important depreciation changes for residential property investors.
Before the change, investors often claimed depreciation on existing plant and equipment assets acquired with a second-hand residential property.
After the change, many investors are restricted from claiming annual depreciation on previously used plant and equipment assets in residential rental properties.
Affected assets may include:
- Carpet
- Blinds
- Appliances
- Air conditioning
- Hot water systems
- Furniture
- Ceiling fans
- Rangehoods
- New assets purchased by the investor may still be claimable.
- Division 43 capital works may still be claimable.
- Commercial property is treated differently.
- Excluded asset values may still matter for future capital loss or CGT record purposes.