Top Property Tax Minimisation Strategies

  • Posted 29 Oct

Top Property Tax Minimisation Strategies

Smart investors know that tax minimisation strategies are one of the most important things to consider when engaging in property investment within Australia.

What may seem like a cautious venture is actually quite simple when you break it down into a few key components, which will have you enjoying the joys of property investment in one of the safest environments in the southern hemisphere.

What Are Tax Minimisation Strategies?

By understanding the rules in place from the Australian Tax Office (ATO), or engaging the services of someone who is a professional in this field, you are able to get all the tax breaks you are entitled to.

Here’s a few simple ways to make the most of the system. You stand to benefit from the ATO’s guidelines for minimising tax when investing in property by just following these suggestions.

1.      Capital Gains Tax – Any money you make from your investments in property will be taxed at your marginal tax rate. When you sell a property, you pay capital gains tax, which is added to your marginal income the year you sell it. By holding the property for over a year means you will pay only half your capital gains tax on it.

With that in mind, property is the biggest investment that most Australians make in their lifetime, so minimising this capital gains tax is first and foremost the number one strategy for minimising the amount of tax you pay to the ATO.

2.     Negative Gearing – Borrowing money to purchase an investment property opens up the possibility to claim many facets against your own tax. This includes the interest on the loan, which can be very large for investors, especially those starting out.

Other items that can also be claimed are things like land tax, council rates and money spent on property management fees. A deduction can be claimed on renovations to the property, which goes into such small details as postage, stationary and even telephone expenses!

As previously mentioned, there’s a lot to take in when it comes to managing your tax minimisation strategies, so it’s always a shrewd move to get professional advice in order to maximise your benefits.

Always seek the advice of a professional before making any investments or tax claims.

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