Reduce Your Property Tax in South Australia

1
Reduce Your Property Tax in South Australia
2
REDUCE YOUR TAXABLE INCOME
Commonly called Negative Gearing, the incentive
was introduced by the Government in 1936 allowing
investors to reduce the amount of income tax they
pay to stimulate the economy by building brand
new property. Negative Gearing underpins all
property investing as it allows you to reduce
your taxable income by offsetting costs related
to the investment against your taxable income.
3
Negative gearing by property investors reduced
personal income tax revenue in Australia by 13.2
billion in 2010-11. The negative cash flow, when
investing in brand new property, can be used to
offset other taxable incomes in the form of tax
deductions and refunds (Source ATO). By
investing in a newly constructed property you
only pay stamp duty on the land component and get
the maximum tax deductions when building and also
on the features and fittings inside the property.
You can then apply to have your taxable income
reduced on a weekly basis by processing a PAYG
tax variation form through the ATO.
4
Process of Building a Brand New Property
It seems many people believe that buying an old
established property will be quicker and easier
than building a new property. This might be
because of the belief that they can charge rent
right away. However, for a start, the stamp duty
on an established property will be substantially
more expensive than the stamp duty on building a
new home. Also you will find that if you buy a
property that was built prior to 1985 you wont
qualify for any building depreciation and as we
know, older properties may also require a lot of
maintenance and repair work.
5
BRAND NEW PROPERTY
With a brand new investment property, the new
property is built from the ground up and rent is
received from the tenant. There are substantial
tax deductions which reduce the owners
contribution to the investment and the overall
out of pocket costs.
6
ESTABLISHED PROPERTY
With an established property, the most
traditional way to invest, the property is
purchased and rent is obtained from the tenant
with the owner contributing the rest. There are
little to no tax deductions.
7
Learn how you can significantly reduce the amount
of income tax you pay. Please Contact us
Property Asset Planning
687 South Road Black Forest, SA 5035 Ph (08)
8338 7206 info_at_propertyassetplanning.com www.prope
rtyassetplanning.com
Get in Touch Facebook.com/PropertyAssetPlanning T
witter.com/propertyasset Linkedin.com/company/2051
001