Did anyone else read the article in todays financial review which reported that the ATO were set to tighten depreciation re investment and residential property which could see a drop in the order of 10 to 15 %in allowable depreciation claims.Seems to me if this is true it will have a drastic effect on the whole investment property fraternity!Any comforting words people?[confused2]
Midas,
Was mentioned earlier in a couple of posts. Some perspective though.
Lets assume most new residences would have approximately $10k in depreciation benefits. If its a 15% reduction, this means $1500 loss of benefits.
Based on the following tax rates, this means the following bottom line impact.
On a marginal tax rate of 48.5%, the increase in tax payable is $727.50 per year or $14 per week.
For those on 18.5% marginal tax rate, the increase in tax payable is $277.50 per year, or $5.35 per week.
You decide whether it will make a difference for you.
James
Im sure those that lose in one way will work something out in another though, dont you?
Elves,
I know that I would to examine current outgoings to see whether I could at least recover some odf that lost benefit.Depending on the rental market that your IP is in, you may be able to do something with the rent…
James
The mooted 15% drop in depreciation won’t affect many properties. Hardest hit will be recently built apartments. Interestingly, with houses, especially older ones, depreciation claims will rise. I have a company that specialises in property depreciation – it’s all we do. I’d mention the name of the company but I’d say that would contravene the forum rules. What the changes do mean is that there are now some definitive guidelines for depreciation. That makes it easier for the ATO to audit schedules. Be sure you only use a Quantity Surveyor who knows the current and new rules inside out – most don’t. Some depreciation schedule providers don’t even use Quantity Surveyors!
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