Tax changes hit investor numbers

first_imgAgents have seen a drop in investor interest after last July’s changes to tax laws.CHANGES which came into effect a year ago surrounding what property investors can claim at tax time are starting to affect the Cairns property market.In May last year the federal government proposed changes to the depreciation of plant and equipment assets and the claiming of travel expenses relating to inspecting, maintaining, or collecting rent for a residential rental property in the federal budget.The travel expenditure is also not recognised in the cost base of the property for capital gains tax purposes.The changes to depreciation mean it is not allowed on floor coverings, airconditioning and appliances within the property at the time of purchase. Big property changes starting July 1 Full size treehouse for $600K Inside absurd $250 million mansion The investor tax crackdown has seen less interstate buyers visiting Cairns, according to Mr Moller.Any investor who purchases a new property can continue to claim depreciation for plant and equipment as usual. Those changes were passed by the senate in November and became law on July 1.More from newsCairns home ticks popular internet search terms3 days agoTen auction results from ‘active’ weekend in Cairns3 days agoAfter a positive start to the year, LJ Hooker Edge Hill principal Ross Moller said investment property sales had tapered off in Cairns. He blamed the more restrictive tax conditions around owning an investment property.“The crackdown on investors means Cairns is less attractive to interstate buyers,” he said.“The incentive to visit Cairns and claim a tax deduction is gone now so I am seeing less interstate customers coming up to look at properties while they’re on holiday. There is no short-term gain to owning an investment property now unless there is capital growth.” LJ Hooker Cairns Edge Hill principal Ross Moller at a property he was selling in Mooroobool.“There are of course long-term gains such as rental returns and potential capital gains. “But, unless you’re a renovator who just gets in and gets out, there’s not much of a drawcard.”The new laws only apply to second-hand residential rental properties bought after May 9, 2017. But Mr Moller said owning property was one of the best ways to build wealth.After buying an investment property, a specialist quantity surveyor will ensure all deductions are identified and claimed correctly under the new legislation. SEE MORE CAIRNS REAL ESTATE NEWS HERElast_img