Property investment is considered an art by many people and with good reason. The intricacies associated with accumulating wealth through real estate can be quite demanding and complex.

You must consider many factors in any new investment venture, including market projection, demographics and different types of property investment loans.

Another very important aspect of real estate projects in Australia is taxation. The nation’s tax laws can affect the amount of returns you earn in any given year, especially if you adopt a negative gearing strategy.

Negative gearing
When using a negative gearing strategy for your property investment, the amount of profit you make is largely tied to the amount of tax you claim.

The reason for this is you are likely paying more money to uphold your real estate investment than you are making in rental returns.

Negative gearing means that you make tax claims to account for that loss, which has the potential to lead to a favourable outcome.

Knowing your stuff
Achieving profit through negative gearing may come down to your knowledge of the tax laws associated with property.

If this is how you intend to operate, you must know what related costs can be claimed on your annual tax form to offset the balance you have paid towards your home loan and maintenance costs.

Renovations and upkeep fees have different rules governing their claiming ability, so you would be well advised to find out which ones are fair game and which are off limits.

A chat with a mortgage adviser may help to clarify the ins and outs associated with taxation and property investment. Experience and local knowledge allow them to offer guidance regarding depreciation, property taxes and other associated expenses.

You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.