Find out if you can claim second-hand depreciating assets for your residential rental property
Second-hand depreciating assets for residential rental properties are depreciable items previously used or installed ready for use by you or another entity.
In most cases, they are things that were existing in:
- a property when you purchased it
- your private residence that was later rented out.
Items can include things like:
- flooring, window coverings
- air conditioners, washing machines, alarm systems, spas, pool pumps
- items used for both the rental property and your own home.
Since 1 July 2017, you can’t claim the decline in value of second-hand depreciating assets, unless the property is used for carrying on a business (for example a hotel) or they are an excluded entity. The change doesn’t apply to properties rented out prior to this date, or where the property is either:
- newly built
- substantially renovated (where all or most of a building is removed or replaced), and
- no-one else has claimed a deduction for the assets
- no-one resided in the property before your clients acquired it, or
- you acquired the property within six months of the build or substantial renovation.
To help get it right, here are a few questions to ask yourself:
- When did you purchase the property?
- Was it a new or existing build?
- Did you live in the property before renting it out?
- When did you start renting out the property?
- Was the asset already in the rental property when you bought it?
- Is the property used for business purposes?