Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 was introduced into parliament on the 7th of September

Changes in government legislation

The new legislation is quite simple when you take away all the long-worded descriptions and we are currently producing differing reports dependent upon the situation. Our reports for properties affected by the new legislation address all the requirements thereof, they also include a second Schedule which details the deferred depreciation on Division 40 Items, providing a cumulative annual figure which can be utilised to offset Capital Gains when and if the property is sold.

How has the legislation affected your depreciation claims?

Division 43 (Put simply, “Depreciation of the cost of building and/ or renovation) is not affected in any way.

    • Properties built or renovated after September 1987, qualify for depreciation of 2.5% per year for 40 years from the date of building or renovating


Division 40 (Put simply, is the depreciation of assets that support the tenant in the property e.g. blinds, carpets, cook tops, hot water services, air -conditioners, smoke alarms, clothes lines and many more) may be affected.

  • Division 40 claims (depreciation of assets) on the following properties are not affected by the new legislation
    • Properties that were investments prior to 9 May 2017
    • Properties that had a Contract on them prior to 9 May 2017 and then immediately upon settlement after 9 May 2017 became investment properties
    • Commercial Properties no matter when they were purchased.
    • Properties owned by Commercial entities (i.e. businesses)
    • Properties that were owned and that were owner occupied, but which became investments prior to the 1 July 2017
  • Division 40 claims (depreciation of assets) on the following properties are affected by the new legislation.
    • Properties which were purchased after 9 May 2017, i.e. on which the Contract was executed after the 9 May 2017.
    • Properties that were principle places of residence that were rented out on or after 1 July 2017
    • The new legislation means that unless the owner directly purchases any item previously affected by Div 40, they cannot claim annual Depreciation thereon, rather the Depreciation is noted and eventually offset against any Capital Gains, hence, they still require the Plant items to be detailed out and depreciated as previously with an annual sum as the figure will be needed when the property is sold.


If you are unsure, call us – we are happy to discuss your property.

Call Rod  on 0417 756 757  for an obligation free discussion about your property.
It may have more depreciation than you ever realised.