The proposal includes 3 options to alter tax policy settings to promote electrification of rental properties, all starting 1 July 2024.
Allow owners of residential investment properties to write off the full cost of split system air conditioners (up to 20kW), heat pump water heaters and induction cooktops against their taxable income, where these have replaced equivalent gas appliances. This would replace the existing depreciation schedules for these items (currently 12 to 15 years).
Allow owners of residential investment properties to classify electrification upgrades, including split system air conditioners (up to 20kW), heat pump water heaters and induction cooktops as ‘Repairs and Maintenance’ rather than as a capital allowance, where these have replaced equivalent gas appliances.
Allow feed-in tariff income earned from Renewable Energy Systems (RESs), such as solar panels, on common areas in strata-titled properties to be declared on the tax return of the owners corporation rather than on that of individual landlords.
The request also sought a breakdown of the impact of options 1 and 2 by tax bracket, by appliance type and by state, as well as the number of additional gas appliances replaced with electric appliances under options 1 and 2 (see Attachment B). The request also sought individual case studies of the financial impact to individuals in different tax brackets for each appliance (see Attachment C).