Guest Alipally

tax relief on second properties does anyone know how this works

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    Guest Alipally

    Hi,

     

    I've heard that you can get tax relief on a second property if it has a mortgage. Does anyone know how this works?

    I'd just like to know if this is going to be a worthwhile thing to do or whether it's more effective to have 2 properties or just have one to enjoy!

     

    All comments gratefully received.

     

    Ali x

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    Guest Nick11

    Whatever you loose financially - ie if you have to pay more out on your mortgage that you get in rent - you can offset it against your tax returns.

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    Guest soggy

    hi,

    one thing to remember is if you sell an investment property in the first year you pay more capital gains tax, I think double,( if you make gains).

     

    Simon

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    Yep,

     

    you can offset your costs for the mortgage interest, management fee's, buildings insurance etc.

     

    If you are paying out more than you are bringing in through rent on the above you will effectively be negative gearing, obviously having the tax offset you then will not be losing as much but as Nick say's you will still be out of pocket, the idea being is that you will make a capital gain over the longer term on your investment.

     

    Also what Simon say's is correct if you sell within 12 month's the gain is fully assessed after that there is a 50% exemption.

     

    This stratgey can also be used to invest money. An amount is borrrowed through a margin loan a tax deduction is available on the interest payment's and then the money is invested in to say managed funds etc.

     

     

    This is just general advice, (sorry have to say it!!)

     

    Andy

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    If you're considering an investment property for the tax benefits, it's worthwhile going along to one of the free seminars run by people like Investment Property Finders and similar. And speaking to an independent accountant. It's something you'll find a lot of clued-up Aussies have done in the past, but it's your own decision whether the current market conditions favour doing it at the moment! You can claim back things like mortgage interest, agent's costs, accountant's fees, and depreciation of fixtures and fittings etc against your tax, but do look into it really thoroughly, and don't rush in thinking you'll miss the boat if not! I don't think the boat is going anywhere fast just for the moment anyway!

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    Guest Jim Scott

    I offer free appointments to discuss the pro's and con's of such things and I come to you in the comfort of your home, and at a time that suits you. No obligation. Best wishes.

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    Guest Nick11
    I offer free appointments to discuss the pro's and con's of such things and I come to you in the comfort of your home, and at a time that suits you. No obligation. Best wishes.

     

    Can second that. Jim is an excellent bloke who knows the ozzie housing market inside and out.

    We used him and very pleased with the results.

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