The Hidden Impact on Second-Hand Assets’ Depreciation Tax Deductions Limits

Hello savvy investors! Did you know that the landscape of depreciation tax deductions for second-hand assets is undergoing a transformation? Brace yourself for the crucial updates, tailored just for you by Wistax Mobile Tax and Accounting Services of Northern Beaches!

The Lowdown on Second-Hand Asset Depreciation Tax Deductions

If your property isn’t utilized for business or falls outside specific entities, your deduction options are shrinking!

Say goodbye to claiming deductions for second-hand assets in your private residence or non-taxable purposes (unless it’s an occasional maintenance stay)!

Salvage Your Deductions!

But wait! You can still salvage your deductions if:

  • You’re using the asset for business purposes (yes, including rental properties!)
  • You fall under corporate tax entities, superannuation plans, public unit trusts, or managed investment trust categories!

Feeling Overwhelmed? There’s Still Hope!

If you purchased your home before 7:30 pm on May 9, 2017!

AND you installed it into your rental property before July 1, 2017!

Liza’s Story: A Real-Life Example

Meet Liza, a homeowner who made a savvy move:

Liza decided to rent out his fully furnished home after living there until June 2017.

Good news for Liza:

  • She rented out his home before July 1, 2017.
  • She bought the property before the magic cutoff date of 7:30 pm on May 9, 2017.

Liza can still claim deductions for the decline in value of those used assets as long as they have an effective life left in them. Score!

But hold your horses, Liza! From the 2017–18 income year onwards, any second-hand assets bought and installed after that crucial May 9, 2017, cutoff time? No deductions for the decline in their value. Tough break!

And if Liza’s property was chilling vacant until July 2017? No deduction for the decline in the value of those used assets. Bummer!

It’s all About Timing!

Remember, timing is everything when claiming valuable deductions! Liza’s got the right idea, but it pays to stay informed!

All WISTAX today for an initial free 15-minute telephone consultation with John and his team on 1800 841 312 if you want to join our fast growing accounting franchisee business