Legally minimising your tax through property investment is a significant benefit that many Australians capitalize on. When a property is ‘negatively geared’, the government subsidises a significant portion of this loss in the form of a tax refund at the end of the year.
With the combination of a tenant (who pays the majority of expenses) and the boost to your tax return, many people are surprised at how affordable it is to hold an investment property, with the purchaser often only needing to cover between 5 and 10% of cost in the first year (this will of course vary depending on individual tax circumstances).
There are a number of other factors such as depreciation, rental return and interest rates that will have an impact on your specific tax refund.
Talk to us at Perceptive Property about how negative gearing can work for you and your portfolio.