Property and Tax update
On 23 March 2021, changes to tax rules for investment properties took investors by surprise. There has been widespread commentary with more to come as the detail unfolds.
The bright-line test has been extended from 5 to 10 years for properties purchased on or after 27 March 2021
The current exemption for the main home changes for properties acquired on or after 27 March 2021, making them subject to a ‘change of use’ rule
From 1 October 2021 property owners will not be able to claim interest on residential investment property acquired on or after 27 March 2021, and interest deductions on borrowings for residential investment property acquired before 27 March 2021 will be phased out over the next four income years.
Different rules apply for different scenarios:
For properties purchased from 27 March 2021, the bright-line test period is 10 years.