Entrepreneur TipsReal Estate

TOP 7 TIPS TO MAXIMISE YOUR PROPERTY TAX RETURN

6. Capital Gains Tax, (CGT): You must pay CGT on the sale profit if you sell your investment property within a year of purchasing it. Capital gains are taxed at the same rate as taxable income in Australia. For instance, if you make a capital gain of $60,000 while earning $40,000 per year (32.5 per cent tax bracket), you will pay income tax of $100,000 (37 per cent income tax) and capital gains of $60,000 will be taxed at a rate of 37%.

However, you are qualified for a 50% CGT discount if you own the investment property for longer than 12 months before selling it, which means you only need to report half of the capital gain on your tax return.

7. Withdrawals from equity loans are not subject to tax: You won’t be required to pay taxes on any money that you remove through an equity loan.

This means that if the value of your property increases and you don’t want to sell it, you may actually access some of that money by obtaining a loan from a bank. You still have access to that amount of money despite the fact that your loan and monthly payments increase. By doing this, you haven’t truly improved your financial situation through the equity loan, thus it usually isn’t a tax deduction because it isn’t technically a “gain that’s been accessed.”


Investors that choose this option can leverage the funds to buy other rental properties, which will hasten the expansion of their portfolio. Check out the video HERE for more details on tax deductions and real estate,

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Source: Alliance Corps Australia.

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