ATO has moved the goalposts again! Checked my QS reports against their new amended list. Lots of changes. Have to go through having my QS reports amended yet again. Went through this last year after the Woodward case. My guess is that depreciation is costing the Government in lost revenue with the rise in property investors over the last couple of years and this will help to slow it down a bit!
The ATO list: http://www.ato.gov.au/large/content.asp?doc=/content/42604.htm
A recent posting on the ATO web site entitled Effective Life Review – Residential Rental Property invited public comment during the week ending 24 March. Well into the third paragraph it is revealed that “as part of the review a list has been prepared of those items which are considered to be depreciating assets and for which deductions may be available.” Most of the general public would not know of or be privy to this document and those who are would not be fully aware of the consequences.
Over the past few years the Government has gradually whittled away at the depreciation returns available on residential investment property and with the latest amendment it is evident that the ATO has been instructed to reduce the amount of allowance to investors even further.
Investors lose $2.4 billion next year in property allowances.
The effects of the ATO changes will result in a massive $2.4 billion per annum loss to residential property investors. The changes which class certain assets as structural, not plant, result in a lower depreciation allowance and in the case of older properties a complete loss as they do not qualify for building allowance. Investors who have purchased off the plan and have utilised depreciation to assist their cash flow to generate an acceptable yield will be disappointed at the prospect of the ATO changes.
With the latest housing boom all Governments at the state level have made tidy profits on the stamp duty revenue collected. It would seem that the Federal Government now wants their piece of the pie by taking back incentives that have been in place for decades.
The ATO list: http://www.ato.gov.au/large/content.asp?doc=/content/42604.htm
Depro comment:
A recent posting on the ATO web site entitled Effective Life Review – Residential Rental Property invited public comment during the week ending 24 March. Well into the third paragraph it is revealed that “as part of the review a list has been prepared of those items which are considered to be depreciating assets and for which deductions may be available.” Most of the general public would not know of or be privy to this document and those who are would not be fully aware of the consequences.
Over the past few years the Government has gradually whittled away at the depreciation returns available on residential investment property and with the latest amendment it is evident that the ATO has been instructed to reduce the amount of allowance to investors even further.
Investors lose $2.4 billion next year in property allowances.
The effects of the ATO changes will result in a massive $2.4 billion per annum loss to residential property investors. The changes which class certain assets as structural, not plant, result in a lower depreciation allowance and in the case of older properties a complete loss as they do not qualify for building allowance. Investors who have purchased off the plan and have utilised depreciation to assist their cash flow to generate an acceptable yield will be disappointed at the prospect of the ATO changes.
With the latest housing boom all Governments at the state level have made tidy profits on the stamp duty revenue collected. It would seem that the Federal Government now wants their piece of the pie by taking back incentives that have been in place for decades.
