New laws passed in federal Parliament are tipped to hit property investors in the hip pocket

first_imgInvestors who buy existing properties will no longer be able to make such substantial deducations.PROPERTY investors are set to be thousands of dollars out of pocket following the introduction of new laws, throughout Australia.The legislation which was passed in federal Parliament means owners of investment properties will be restricted in what depreciation they can claim on their assets.Experts predict they will be an average $4200 worse off.The changes relate only to investors who bought an existing property after May 9, 2017.Those who bought before that date or a new property will not be affected.BMT Tax Depreciation CEO Bradley Beer said basically the changes meant buyers of existing investment properties after that date could not claim depreciation for items in the home, such as air conditioners, carpet or solar panels, if they did not pay to install or replace them.He said it didn’t matter if the item was only a few months old when it was put into the property and that the quality of such items would have been factored into the sale price.Previously if the investor owner of a property had not installed such items during their ownership they could still claim depreciation on them, up to a certain time period of ownership.More from news02:37Purchasers snap up every residence in the $40 million Siarn Palm Beach North2 hours agoNew apartments released at idyllic retirement community Samford Grove Presented by Mr Beer said the changes would mean thousands of dollars less for property investors. Bradley Beer, CEO of BMT Tax Depreciation“According to our analysis over the first five years of ownership the new law will result in an average loss of around $4236 in depreciation deductions each year for those impacted,’’ he said.“Any investors in a new residential property it doesn’t affect at all, but any investor in an existing residential property is affected from a cash flow perspective in terms of tax by the changes which have been passed today.’’Mr Beer said he didn’t think it was right that owners could not claim depreciation if they didn’t make the initial outlay.He said the legislation was effectively rendering the value of fairly new items to zero.“Which is an odd thing to do and does affect the investors hip pocket and distorts the market a little.’’Mr Beer believed many investors would not be fully aware of the ramifications of the new laws even though it had the potential to affect thousands of them.last_img

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