Investment properties - claiming for work done

[Tamara (Homes Down Under)]

You may still be fine depending upon how large your investment losses were and how much tax he pays! They may balance themselves out.

tamara

[niknjas]

Thanks Tamara. It just seems like a minefield when you haven't got a clue.

[csobrien1966]

All of our landlords use this company who deal with nothing else but investment properties

BMT www.bmtqs.com.au

hope it helps

[niknjas]

All of our landlords use this company who deal with nothing else but investment properties

BMT www.bmtqs.com.au

hope it helps

Thank you, will check it out

[Diane]

Ask your accountant about the pros and cons of setting up a family trust to take full advantage of tax concessions/reductions

[Andrew Williams]

Here is an example of negative gearing just to clarify things.

Also see this calculator as a useful tool http://calculators.ato.gov.au/scripts/axos/AXOS.asp


Let's say that someone has made a loss/has deductions of $10,000 per annum after taking into consideration rental income less allowable expenses/costs.

In this example the total annual income = $60,000

Less allowable deductions = $10,000

Tax payable = $8,600 (this takes into account medicare and low income tax offset)

Net Income = $51,400


Compare this to someone without a tax deduction.


Income = $60,000

Tax payable = $12,150

Net income = $47,850


Therefore tax benefits of $3,550 actual loss $6,450 ($10,000 - $3,550).

So essentially negative gearing means that you are still making a loss but that loss is lessened by the same rate as your marginal tax rate.

Usually this tax rebate is given at the end of the financial year once a tax return has been lodged however it may be possible to do a variation so that you pay less tax along the way.

As mentioned a good Accountant will be able to clarify all of this for you.

You should also discuss your exit strategy i.e how long you are looking to hold it for etc as it (like Diane pointed out) may be beneficial to look at trusts etc


Hope this helps.

Andy