Property industry lobbying has forced the government to change its mind on part of the depreciation changes it announced in the May budget.The government had removed the right to claim depreciation from buildings that had a usable life of more than 50 yea
Property industry lobbying has forced the government to change its mind on part of the depreciation changes it announced in the May budget.
The government had removed the right to claim depreciation from buildings that had a usable life of more than 50 years but also included claims for depreciation on refurbishment of commercial buildings, covering fittings such as carpets, blinds and air conditioning units.
Removal of depreciation, which had proved helpful in creating tax losses for homeowners and property investors and costing the tax system many millions of dollars, was aimed at discouraging property investment ahead of other forms of investment.
However, the commercial property industry cried foul when refit depreciation was canned because refurbishment is an essential part of leasing, particularly in a depressed market.
This week Revenue Minister Peter Dunne announced the change, hidden in a bunch of remedial measures led by changes to Working for Families to prevent people structuring their income to inflate their entitlements.
"Since budget night there has been considerable consultation on the implementation details of the tax measures announced and I believe the changes outlined today are a fair and pragmatic response," Mr Dunne said.
Businesses will also be able to claim the depreciation loading on assets where investment decisions were made before May 20, 2010 but not completed until sometime after.
