Benefits/tax breaks from buying an investment property

It is the start of a new tax year, and it is never too early to think about how you can reduce your tax.

Below are a list of benefits/tax breaks you might be eligible for by owning an investment property in Australia.

1. Tax Concessions: Tax breaks from the Government such as deductions for the cost of borrowing, depreciation expenses, repairs and maintenance, and land tax can help reduce the cost of owning an investment property.

2. Capital Gains Tax Exemption on sale: If an investor holds an investment property for at least 12 months and makes a profit from the sale, they may be eligible to have some of these profits exempted from capital gains tax.

3. Negative Gearing: If a property investor is paying more in interest or property related costs than the rent received, they may be able to claim some deductions on their tax return.

4. Land Tax Savings: Investors can often receive a discount on their land tax if the property is used for investment purposes (as opposed to owner occupation).

5. Positive Cash Flow: Though it is not a tax break, positive cash flow from rental income can help pay the mortgage on an investment property and provide extra financial breathing space.

Please note that we recommend speaking with your accountant/financial planner before making any financial investment into property.

But if you would like to chat property options, get in touch today!