Investors to lose thousands in legislative tax amendment that’s gone “too far”

first_imgA high-profile tax depreciation expert said amendments to tax law would result in property investors losing thousands of dollars.BMT Tax Depreciation CEO, Bradley Beer, claims small investors will lose thousands of dollars if an amendment introduced to federal Parliament this week becomes law.Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 goes too far in its attempts to address integrity issues, according to Mr Beer.“These changes are attacking ‘mum and dad’ investors — police, teachers, nurses — that are the bulk of residential property investors (and) who are trying to provide for themselves in retirement,” Mr Beer said.Mr Beer said the changes will cost an average investor $4,236 in tax deductions in the first year, which equates to an after-tax loss of $47 per week, or $2444 for the year.“You can’t just up your rent by $47 per week, or your property will be vacant,” he said.Mr Beer said the changes deny tax deductions for the decline in value of second-hand assets found within residential investment properties.More from newsMould, age, not enough to stop 17 bidders fighting for this home1 hour agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investor1 hour ago“Anyone who has entered into a contract to purchase a property that’s second hand from budget night no longer gets to claim deductions on their plant and equipment (P & E) regardless of the age,” he said.Mr Beer said items such as stoves, hot water services, air conditioning and carpets would no longer be depreciable, even if they were less than 12-months old.“There’s 167 different potential items of P & E in a residential property and most investments have at least 10 to 20,” he said.Mr Beer said the amendment was supposed to take care of a legitimate issue around owners overvaluing their P & E assets when claiming deductions, but the new laws are an overreach.“What they have done goes much further than addressing this integrity issue by making a transaction between two parties extinguish the remaining effective life of a previously depreciable item,” Mr Beer said.“In my opinion, it goes well beyond the basis of what should happen,” he said.Follow Kieran Clair on Twitter at @kieranclair or Facebook on Kieran Clair — journolast_img read more

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