You don’t have to be a specialist to start investing. Property investment involves a lot of personal and financial motives and can be quite rewarding if approached the right way. Buying or investing in a rental property is one of the most popular forms of long-term investments.
Our experienced staff can assist you with this matter to make sure that you make the most of your investment benefits and help you in achieving financial wealth that you desire..
This is one of the most important benefits for investors since the Australian Tax Office allows property investors to deduct their investment expenses against their ordinary income. You can also claim costs such as interest on loans, depreciation, council rates, water rates, insurance, strata, agent fees, and other deductions allowed by the ATO. Therefore it would lower their taxable income, the tax bill will be lower, and therefore property investors often receive larger tax refunds when they lodge their returns each year.
Property investors can also benefit from the depreciation, which is the decline in the value of the property, fixtures and fittings over several years. Depending on the age of the property and whether it’s been renovated, it can result in tax deductions of thousands of dollars every year.
Capital Gain Tax
If you sell your own home (principal place of residence), you do not pay any tax on the profit. Though for an investment property you only pay capital gains tax on half of the profit if you’ve held it for at least 12 months or more.
Self Managed Super Fund (SMSF)
Buying a property through your SMSF is another way you can generate profits from residential real estate investments for when you retire. You use your super fund to purchase the investment property along with a SMSF property investment loan to make up the total. This is then paid off through your super contributions from your employer and the rental income from the tenant.
Contact our team today to further discuss property investment and related tax benefits.