Home
  • plan
  • Invest
  • Property
  • enquire now
  • Learn
Home
DPN
  • plan
  • Invest
  • Property
  • enquire now
  • Learn

Finance

The tax benefits of property investment

For anyone looking to grow their long term wealth, investing in property is ideal.

TAGS

Finance (119) / Intermediate (544) / Tax (49)

For anyone looking to grow their long term wealth, investing in property is ideal. It's relatively easy to understand, it's potentially highly lucrative and, compared to other investments, it is very flexible. Alongside these considerable benefits are the numerous tax advantages that come with property investment. These are just a few of the points you'll want to discuss with your accountant if you decide to invest in real estate.

Negative gearing

Even if your property is technically a money losing venture, you can make it work for you thanks to Australia's tax structure. If the expenses you're paying on your property - interest repayments, repairs, advertising - are larger than the income you're getting for it, you can offset the resultant loss against your other income to lower your tax burden.

Depreciation

Everything we own eventually decreases in value over time, and property is no different, whether it's a new or existing dwelling. But because your investment property is an income-producing asset, you can claim this depreciation in value against your taxable income. The two main types of depreciation are on plant and equipment - or the items within the property, such as carpets and appliances - and building allowance, which refers to structural features like concrete. You'll need a quantity surveyor to carry out an inspection and draw up an official depreciation schedule, typically between settlement and tenants moving in.

FREE - No Obligation

Ask us for a free Property Investment Plan

Rental property expenses

Along with all this, the Australian Taxation Office (ATO) allows investors to claim a wide variety of expenses associated with running a rental property as tax offsets. This is a long list, but it includes expenses that come from:

  • Advertising your rental property for tenants
  • Council rates
  • Water charges
  • Interest payments on your investment finance
  • Pest control
  • Travelling to inspect a property or pick up rent
  • Maintenance and repairs

This is just a small sample. The ATO lists many more expenses on its website, and if you're hoping to be a successful Australian property investor, it's worth taking a look. Just about any expense associated with running a rental property can be claimed for tax purposes.

 


Follow us on Twitter for more news, tips and inspiration.
Like us on Facebook and Google+ explore our Pinterest boards.

Like this article or found it helpful? Share it!

Newsletter

Receive our articles directly to your inbox

Next article

The costs involved in purchasing an investment property

Go to articles list

Programs

Work with us
Giving back
Become an affiliate
Refer a friend
Help desk
Property Management
Finance

Locations

Head office
Australia
Hong Kong
Singapore

Contacts

Toll free in Australia
P. 1300 723 318
Outside of Australia
P. +61 2 9525 2033

Social Media

Newsletter

Terms of use | Privacy policy | Guarantees

This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879. Casa Capace Operations Pty Ltd, NDIS provider number 4050038018 trading as Casa Capace.