The second restriction on deductions relates to depreciation. From 1 July you cannot claim a depreciation deduction for second hand (“previously used”) assets acquired after 9 May 2017 (Budget night). A typical example would be where the asset is acquired as part of the acquisition of residential premises (eg air conditioner, carpets, blinds). Another example is where the asset was purchased second hand from “Gumtree”.
Deductions will still be available for new assets acquired by residential rental property owners.
When preparing your tax return for the year ended 30 June 2018, your accountant may request further substantiation for assets purchased to ensure they are new or fall within the legislative restrictions.