Mid-tier reminds on budget announcements impacting tax time

As the end of financial year approaches, BDO tax partner Mark Molesworth has reminded accountants and property investors of changes introduced in the budget 2017 that will impact investors this tax time.

“Investors who previously had tax deductions for travel expenses related to their investment property will no longer be able to make these claims,” BDO tax partner Mark Molesworth told Accountants Daily.

“From 1 July 2017 the government has ruled them out, even for those travelling to collect rent, maintain or inspect a premises, saying many have been incorrectly obtaining this deduction.”

There are also other property-related changes that accountants and their clients need to be aware of according to Mr Molesworth.

“Under the new federal budget measures, the applicable CGT withholding rate for foreign tax residents will increase to 12.5 per cent from 1 July 2017 and the threshold for residential property will fall to $750,000,” he said.

“From 1 July 2017, the government will also limit ‘plant and equipment’ depreciation deductions to outlays actually incurred on new items by investors in residential real estate properties.”

BDO recommends that investors should consider making a trip to inspect their residential rental property or completing the purchase of a rental property with existing depreciable items before 30 June 2017 to obtain a tax deduction that will not be available after 30 June 2017.