• Limit plant and equipment depreciation deductions to outlays actually incurred by investors

    In the 2017-18 Budget, the Government announced that it will deny income tax deductions for the decline in value of previously used plant and equipment in residential premises used for residential accommodation.

    The changes will apply from 1 July 2017 to:

    • previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time
    • plant and equipment acquired before 1 July 2017 but not used to earn income in either the current or previous year.

    Investors who purchase new plant and equipment after 9 May 2017 will continue to be able to claim a deduction over the effective life of the asset.

    The changes do not affect deductions that arise in the course of carrying on a business, or for:

    • corporate tax entities
    • superannuation plans other than self-managed superannuation funds
    • public unit trusts
    • managed investment trusts
    • unit trusts or partnerships whose members are the above listed entities.

    Legislation and supporting material

    The Treasury Laws Amendment (Housing Tax Integrity) Bill 2017External Link was introduced into Parliament on 7 September 2017.

    More information

      Last modified: 13 Sep 2017QC 51990