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Accountants & Financial Planners    Strategies    Develop Your Property Portfolio
Are you looking to distribute your portfolio risk?  Did the stock market let you down?  Why don't you invest in property?

There are lots of advantages!!

Borrowing money is usually how people get a tax deduction on investment schemes.

You borrow money to buy an asset that produces an income. The interest you pay is deducted from your assessable income and you pay less tax. Some schemes suggest you pay the interest in advance to get the total tax break immediately rather than piecemeal.

Have you ever heard of Negative Gearing?  It's one way to invest your money and increase your wealth! Negative gearing allows you to invest with the objective of saving on taxes.  Growth and capital appreciation in the value of the property is what is most important if this strategy is used.

How does it work?

Negative Gearing is the tax benefit that accrues when the outlay from an investment is bigger than the income it produces.  You realize a negative income.  Thus you pay lower taxes investing your money in property when negatively geared.

Lets see an example:

 Property Investment

Personal Taxes

(A)  Rental Income
  $15,600 (D)         Gross Income
  $45,000
          Tax Payable
  $10,700
 Interest $16,000  (E)            Net Income
 $34,300
 Insurance  $500    
 Maintenance  $ 1,000
 (F)    Taxable Income  D - C 
 $40,400
 Rates  $1,300                Tax Payable
  $9,020
 Rental Manag
  $1,400 (G)           Net Income
  $31,380
(B)   Total Outlays
  $20.200
    
(C)    Total A - B
 -$4,600
 (H)      Tax Saving E - F
  $1,680

What can you deduct:
  • loan interest
  • insurance premium
  • fees (legal and accountant advices)
  • rates and local government charges
  • maintenance costs
  • other business expenses (bank charges)
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