The legislation to tighten some aspects of investment property, and levy a charge on vacant foreign owned property has been passed in the Senate.
The legislation prevents property investors from claiming travel expenses when travelling between properties, as well as tightening depreciation on plant and equipment tax deductions.
Foreign owners will be charged a fee if they leave their properties vacant for at least six months in a 12-month period, in an attempt to release more property to ease supply. The latest Census showed that there are 200,000 more vacant homes across Australia than there were ten years ago.
Introduced with the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017, the bill amends the: Income Tax Assessment Act 1997 to: provide that travel expenditure incurred in gaining or producing assessable income from residential premises is not deductible, and not recognised in the cost base of the property for capital gains tax purposes; and limit deductions for plant and equipment assets used for producing assessable income from residential premises to when the asset was first used for a taxable purpose; Foreign Acquisitions and Takeovers Act 1975 to implement an annual vacancy fee on foreign owners of residential real estate where residential property is not occupied or genuinely available on the rental market for at least six months in a 12-month period; and Taxation Administration Act 1953 to make consequential amendments.
