Tax changes for property investors and small business.

For residential investment property investors who own a property as at 9th May, 2017 they can still claim a deduction for various plant and equipment on their investment property. Should they sell the property the new purchaser will not be able to claim any depreciation on the acquired assets. They can claim depreciation on any new purchases they buy directly, but not on the existing property. The reason behind this is that the ATO believes that some plant and equipment items are being depreciated by successive investors in excess of their actual value.

Also from 1st July, 2017 the ATO will disallow deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential property. The ATO is concerned investors are claiming travel costs that are not being apportioned correctly for private purposes.

Extending the $20,000 immediate write-off for small business

Small businesses are able to claim an immediate write off for asset purchases that are less than $20,000 by 30th June, 2017. However the Government will extend the concession to 30th June, 2018 for businesses with a turnover less then $10 million. This means small businesses will be able to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for by 30th June, 2018.

Website expenditure for small business would be fully deductible in the relevant year it is ready for business use.