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2017-18 Federal Budget Update – Property

Property Investors Budget Update

It was like the Oscars for accountants on Tuesday night – the most exciting Tuesday night of television for the year for tax accountants has again come & gone. Tuesday 9th May 2017 the 2017-18 Federal Budget was handed down by the Turnbull government.Here we take brief look at the changes announced that will affect property investors and property developers.

Property Investors

  • Depreciation deductions on 2nd hand plant & equipment will be disallowed from 1 July 2017. This means, owners of investment properties where they are not the original owner of the plant & equipment (e.g. dishwasher, fans) will no longer be able to able to claim a tax deduction for depreciation. Depreciation on plant & equipment will continue to be claimable where the owner is the 1st owner of the equipment (i.e. they purchased & had it installed).
  • Travel expenses related to residential rental properties will be disallowed from 1 July 2017. This does not prevent owners engaging real estate agents to do so on their behalf.
  • The CGT discount will be increased to 60% (from 50%) for Australian resident individuals investing in qualifying affordable housing (e.g. NRAS properties).
  • The CGT withholding rate for foreign tax residents will rise from 10% to 12.5% from 1 July 2017.
  • Purchasers of Australian real property from foreign tax residents will be required to withhold CGT withholding tax for properties of $750,000 and over from 1 July 2017 (down from $2 million).

Property Developers

  • The $20,000 instant asset write-off for small businesses has been extended to 30 June 2018.
  • Purchasers of new residential properties to remit GST directly to the ATO as part of settlement from 1 July 2018. [Updated – read our blog on GST Changes for Property Developers].
  • Foreign ownership in New Developments is now restricted to 50% from 9th May 2017.

Interested in finding out more about how these changes will affect your property portfolio or property development business, please contact our Goad Accountants’ tax team on (07) 3849 3816 or tax@goadaccountants.com.au.

 
Disclaimer: The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and are based on Goad Accountant’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

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Karen Goad
Karen Goad
Owner & Founder of Goad Accountants and Simply Business Bookkeeping. Karen is a Chartered Accountant and Certified Tax Adviser with over 19 years of experience advising property investors, property developers, veterinarians, small and medium business and helping them get the most out of their business through accurate record keeping, tax advice, KPI monitoring and profit improvement strategies. Goad Accountants also specialises in self-managed super fund administration.

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