Property Investment as a Tax Saving Vehicle
In June 2014, Australian government on the whole amassed in excess of $1 billion in taxes each day. Not a single level of government in the country missed out on collecting less than $100 billion between March and June 2014. From $112.25 to $117.56, the leap has been 4.7% on an average. An average estimate is $1.3 billion in taxes each day.
Claiming tax depreciations
Who is paying this tax? The citizenry of course! So it is only fair that we do not miss out on claiming any tax deprecation that curbs our overall taxable income. How do you go about doing this? There are many ways to do so; something your financial adviser will suggest you in unequivocal terms. If you are a property investor, you will do well to know that cumulative tax depreciations can help you amass almost 60% of the price of your property. Property investment not only helps create wealth but also doubles up as a tax-saving vehicle.
Be ATO compliant with your property investment
In order to be compliant with the ATO guidelines, you need to create a tax depreciation schedule the moment you have settled a property. Your tax depreciation report is tax deductible, too, and it is the only cost you have to fork out to enjoy your tax savings. It is worth remembering that any depreciation report you need on your table must be prepared by companies accredited to the Australian Institute of Quantity Surveyors (AIQS).
Only about 40% investors are claiming tax depreciations
In fact, I have something -perhaps valuable- to add here. We are not enjoying our tax rebates too well. Already, about 60% of those making a property investment are missing out claiming important tax depreciations like ‘capital works’ and ‘plant and equipments’. A little more diligence is definitely the call of the day.
What strategies do you implement to maximise your tax savings?