Tax and Negative Gearing

Simon and Terri-Lee

"Our Smartline Adviser was prepared to do the research and come up with a solution. Too many people try and cookie-cutter you or just give up." Simon and Terri-Lee

"When Adam’s parents suggested he contact Smartline, he was excited to hear he could secure a loan with a savings plan and some help from his parents." Adam

Adam
Adam and Natalie

"We had a broker who didn’t make us feel foolish for asking questions, even if it was for the third or fourth time."
Adam and Natalie

"Nothing was too much trouble – our broker met us after hours, and he always got back to us promptly with the answers to any questions we had." Angelo and Belinda

Angelo and Belinda
The Humphries

"We knew we had built considerable equity in our property but were not sure of exactly what to do with it and how best to use it."
The Humphries

"I’ve got a better interest rate, better flexibility, facilities and best of all less stress!" Irene

Irene
Simon

"I refinanced my previous property with my Smartline Mortgage Broker, and the service was so good we stayed with him this time around." Simon

"Building a house can be a very overwhelming & emotional process as there is a lot of money involved, but our broker took care of everything and was always available when I called." Fiona & Jamie

Fiona & Jamie
Helen and Michael

"Our Smartline Mortgage Broker has been fantastic. He showed us how refinancing our home could not only save us money, but also make it possible to buy an investment property." Helen & Michael

Negative Gearing & Property Investment Tax Issues

Having a good understanding of the tax issues involved in property investment is vital if you are planning to build a solid investment portfolio. This knowledge will also give you a true idea of how much your investment will cost you each year.

Expenses

Your Smartline Mortgage Broker can provide you with an indicative cashflow analysis of your investment property over time, including loan repayments, strata fees, rates, management fees, maintenance costs, and property taxes.

Negative Gearing

An investment property is ‘negatively geared’ when the mortgage interest and other tax deductions – such as management fees, maintenance costs and rates – are greater than the rental income. This results in a net loss that may be offset against your other income (such as your salary), to lower your overall tax bill.

In this way, the tax man – as well as your tenants – helps you to pay for your investment property. Hopefully your property is steadily appreciating in value in the meantime.

Depreciation

One of the key elements of an investment property’s effectiveness is the ability to make it a tax-effective investment strategy by depreciating items. In order to get all the deductions you are entitled to, it is recommended that you call on the help of an expert. Specialist companies can inspect your property and estimate the cost of the building’s capital works, along with the value of fixtures and fittings.

Other Property Taxes

As well as council and water rates, investors can expect to pay capital gains tax and land tax. Capital gains tax applies to investment properties purchased after 19 September 1985 and sold after a period of 12 months. Land tax is a State-based annual tax that is based on land value only and is tax-deductible in relation to any income-producing property.

GST (Goods and Services Tax)

Property investors are unable to claim GST credits for general property expenses that incur GST, such as management fees and repairs and maintenance, as GST does not apply to rental income. GST does not apply to interest and loan repayments, Bank charges and fees, and council and water rates.

Back to Top
1800 020 066 - Save time and money. Call now and see how
Have one of our advisors call you

Website Design by Pretty Pollution    Website Optimisation & Search Marketing by WEBOPTIMAL