How to build your property portfolio using the tax man’s money?
“It is crucial to get the tax strategy right from the beginning. The wrong choices during the purchase period can result in losing tens of $1000’s in tax benefits. It is also very costly to change the tax structure further down the track.”
Issues that you need to consider as a property investor are:
- – What structure can maximize tax benefits — individual, company, trust, self managed superannuation fund?
- – What income tax, negative gearing, capital gains tax and land tax issues related to each structure are — choosing the wrong structure can lead to missing out on tax savings or benefits.
- – Which name to buy in to maximize tax benefits — most people think that they should buy in the higher income earner’s name and this may be correct but can exacerbate capital gains tax and land tax.
- – Tax deductibility of pre-purchase and ongoing costs — can you claim the travel expenses or other associated costs?
- – How to maximize tax deductions — how are you going to record all your expenses? Should you get a depreciation report? What about travel expenses for interstate properties? Can you renovate before a tenant moves in and claim these expenses?
- – Structuring finance so as to maximize tax benefits — this is a very important step that many people get wrong without the correct assistance.
- – Is there any way of legally extracting the equity from your home and using it to buy your next home in a tax-effective manner? Perhaps.
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