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The Budget 2017 and Tax Depreciation for Property Investors

With the release of the 2017 Budget, there has been some noted changes that will affect property investors, the first one is the removal of claiming travel expenses to visit your investment property. This may not worry a lot of investors if their properties are located in the same city and you occasionally visit your property. The biggest saving to the governemnt will be from investors that have investment properties in other states and fly to see their properties or maybe book accomodation when there. This will no longer be claimable as a deduction. The other change and this the most worrisome one is the limiting of deductions for plant and equipment to the current investor.

From the Budget 2017 website

  • Better target plant and equipment depreciation deductions to those expenses actually incurred by investors.

This is the only detail available at the moment and the apparent savings to the Goverment over the next few years is $260 Million, this doesnt sound like a lot as the amount of depreciation claimable from existing plant and equipment far exceeds this amount. A typical property would have between $6000 to $10,000 of existing plant and equipment and if you multiply this by how many investment houses are sold every year then the $260 million falls way short. We will just have to wait and see when the details are released!