Diving into property investment is like playing a complex game of chess. You’re setting up your pieces, contemplating your next move, and aiming for that checkmate—financial freedom and a hefty ROI. But one element often overlooked in this game? The taxman. Yep, he’s playing too. But the good news is, the rules are not entirely against you. So let’s dig in and unpack this…
Don’t Let Taxes Be the Boogeyman
We get it. The thought of taxes can cause anyone to break out in hives. But here’s a reality check: taxes aren’t the villain in your property investment story; they’re just a hurdle. And like any hurdle, you can jump it—with style.
Your Tax-Saving Toolkit
Here’s a toolbox filled with gadgets you can utilise to lessen your tax burden:
- Mortgage Interest: Yup in most cases, you can write off the interest on your mortgage.
- Council Rates and Land Tax: As it’s an investment property you don’t just pay them; you can claim them!
- Upkeep Costs: Broken plumbing? Claim it. Need to repaint? Claim it.
- Property Management Fees: If you’re too busy enjoying life and have someone manage your property, those fees are deductible too.
- Depreciation: Think of this as the slow drip that fills a bucket. You can claim a bit each year, and it all adds up.
Note: To claim any of these, you’ve got to be earning rental income. So keep those receipts!
Pro Tips for More Savings
- Location, Location, Location: If your property is in a high-growth area, not only do you get good rent but potentially a high selling price. That’s a win-win.
- Consult a Pro: Tax codes are complex. They’re like reading Tolstoy’s ‘War and Peace’ but without any of the human drama. So, consult a tax advisor or accountant who can guide you through the maze.
So in short, investing in property shouldn’t feel like you’re navigating through a minefield. Think of these tax-saving tips as cheat codes for your game. But like all cheat codes, they’re best used wisely. And if you’re still unsure? Just give me or your tax expert a call.
Want to learn more about property investment? Here’s a great book called “Rich Dad Poor Dad” by Robert Kiyosaki, or consult the Australian Taxation Office website for all the nitty-gritty.
This article was written by Nicole Monks, Mortgage Consultant with Inspired Money, and provides general information that should not be considered personalised financial advice. If you have specific questions or concerns book a session to review your current mortgage situation or any other lending issue contact Nicole directly on 08 6222 7909 or book a meeting now via his booking page.