Thanks for your comment.

Yes, that’s correct. You won’t be able to claim pre-existing Division 40 assets which are classed as those that are ‘easily removable or mechanical in nature’ such as hot water systems.

But you’ll still be able to claim all new Division 40 assets, and all capital works (Division 43) of the apartment and a portion of the common areas. On average, capital works make up 85 – 90 per cent of total depreciation claims and if the apartment was constructed in 2018, you could potentially claim capital works until 2058.

Please get in touch with our team on 1300 728 726 and we can provide an obligation-free depreciation estimate over the phone.

Thanks,
The BMT Team

What a nice read, though before I order a report could someone please confirm my situation?

So I bought an off-the-plan apartment unit on 11 November 2017 and the settlement date was in late 2018, it actually was my primary place of residence between late 2018 – early 2020.

The unit was officially rented out on 1 July 2020 and 80% of the furniture and appliances were pre-existing ones. So in my scenario, I can’t claim these items under Division 40 at all? Not even those fixtures like range hoods, package aircon, hot water systems?

Thanks.
Eddie

Thanks for your comment.

You may be able to use this capital loss to offset any capital gain, including shares. However, the property/assets would need to be disposed of (sold) before the amount can be used for the offset.

We strongly recommend discussing this with your accountant, as they can provide advice on this topic.

Thanks,
The BMT Team

Can I offset capital loss from previously used plant & equipment in the rental property ( leg from 1 July 2017) for which I cannot claim Div 40 against capital gain on shares? Or it is to be used only when selling that rental property?

Thank you,
Anastasiia

Thank you for your comment. It’s best to ask your accountant as they’ll be able to assess your personal situation and discuss the finer details with you. In general, plant and equipment assets do not form part of the cost base for capital gain purposes, just the division 43 capital works component.

Thanks,
BMT Team

Yes, that’s correct. For second-hand properties investors can only claim original capital works (division 43) or capital works related renovations.

The exception is if the property has been substantially renovated. We can help ascertain whether the property has been substantially renovated as long as enough detail can be provided from the previous owner. A generic makeover of paint and carpet doesn’t count as substantial for instance, so it’s important to have the correct information.

In regard to your next purchase, we provide services in regional NSW including Wagga Wagga. If you’d like to know more about our services, contact 1300 728 726 or visit bmtqs.com.au/apply-online.

Thanks,
BMT Team

just a quick question,
I understand that a new build (granny flat or home for IP purposes) can have a full Dep schedule carried out.
For older homes that have a reno before sale for an IP purchase, what can we claim. Building only?
We are looking to purchase an existing property in regional NSW for an IP.
Also can you offer your services in Regional NSW, IE Wagga Wagga etc?

Cheers
Peter T

A developer can treat vacant units as trading stock and rent them for up to six months. The developer must sell the rented units within this period for an investor to be eligible to claim plant and equipment depreciation. If the developer sells the units after the six month period, the investor can no longer claim depreciation for the assets.
Given the complexity of this scenario, we’d recommend contacting our expert team on 1300 728 726 or enquiring online.

Thanks,
BMT Team