Quality Investment Property Tax Advice
Find out the Investment Property Tax implications you should know?
If you are thinking of buying an investment property or turning your current residence into an investment, there are tax implications you must consider. Depending on whether or not the property brings in an income, you will still need to account for it each year when submitting your taxes. As an investor, you should be familiar with the tax implications that apply to the sale of investment properties
Tax events and implications while you own your investment property
Depending on your personal financial situation owning an investment property can have some tax benefits. If you are renting out the property (i.e., it is a source of income) there are some expenses you can claim against your personal income. These expenses include things like interest on your mortgage, losses incurred due to a shortfall between your mortgage and the rental income (known as ‘negative gearing’), insurance, repairs and maintenance, advertising costs, property management fees and council rates and strata levies. You should always seek relevant tax advice from a professional tax agent before claiming these types of deductions.
If your property is positively geared (the income it generates exceeds the cost of owning the investment) you are still able to claim property-related deductions, but as the rent will add to your taxable income for the year you may be taxed in a higher bracket.
Tax events and implications when you sell your investment property
When it comes time to sell your investment property a tax event will be triggered. Capital Gains Tax is the key tax implication in this situation and Foreign Residents Capital Gains Withholding Tax may also apply to investors who live abroad.
Capital gains tax is the tax you pay on any capital gain (profit) you make from the sale of certain assets, including investment properties. It forms part of your income tax and is payable to the Federal Government.
With the exception of your family home, most property sales are subject to the tax.
Tax events and implications if your investment property is transferred or bequeathed
In the event that you pass away, and an investment property forms part of your estate, the beneficiary of the property will not pay tax on the property in the first instance. If the beneficiary decides to continue to use the property as an investment, they will take on any of the applicable tax-related responsibilities. If the beneficiary decides to sell the investment property, they will be partially exempt from paying CGT if they choose to sell the property within two years of inheriting it, regardless of whether it continues to produce income or not.
Our Expert Property Tax Advise will help you to :
Maximize the overall outcome related to investment properties
Assess feasibility & tax implications when buying or selling investment properties for / from your property portfolio
Guide you to achieved most favourable tax outcome based on the stage of your property portfolio lifecycle (Foundation, Acceleration or Legacy)
Keep you up to date with any changes to tax rates and regulations, helping you stay in compliance with Australian tax laws
Offer tailored advice based on your unique financial situation, ensuring you make the most informed decisions possible
Make certain you claim all the deductions you're entitled to