Episode #74 Tax Effective Property Investment Strategies

Welcome to our next edition of the Propertybuyer Podcast.

 

Today's Topic is Tax Effective Property Investment Strategies

 

It’s that time of year again – almost the end of Financial Year, when everyone pays more attention to the amount of tax they are paying on their pay slips and the advertisers go mad promoting end of financial Year deals. It’s one of the two absolute certainties in life – death and taxes.

But while you have the rest of your life ahead of you - how you can you make smarter and more tax effective decisions about your tax situation?

Are there legitimate and legal ways to reduce your tax by using smart strategies or structures that could also better protect your assets?

If you are paying 45 cents in the dollar then effectively you are working for the government from Monday to Wednesday lunchtime.

 

To help our engaged listeners get a better insight into Tax Effective Property Investment Strategies – we are privileged to have Jay Gounder, Director, Agilis Chartered Accountants with us today

 

Thought of the Week :

 

“The only person you are destined to become is the person you decide to be.” Ralph Waldo Emerson

Topic:  What are the most Tax Effective Property Investment Strategies

 

Podcast with Jaynesh Gounder, Director, Agilis Chartered Accountants

Questions we will cover in today's Podcast:

1. Are you an active property investor yourself?  What motivated you to started with property investing?  
2. Do you have a particular style or strategy with property investing?
3. How has your strategies evolved over time?
4. What is the best structure to purchase a property in?  personal name, company, trust – how do you decide which name or entity to purchase in?
5. What are the implications of buying Investment property in the wrong entity?  (ie paying lots  more unnecessary tax)
6. High income earners like medical doctors, specialists, lawyers and finance professionals on high incomes typically use negative gearing as a strategy. What do you think about that strategy?
7. What are the advantages disadvantages of property investment using your self managed super fund?
8. Land tax varies considerably across each state.  How can investors minimise their land tax exposure?  How much of a consideration is this when selecting a location to invest?
9. Do you have any specific investment criteria you recommend when selecting a property strategy?
10. What criteria do you use for selecting a location to invest?
11. Tax deduction confusion around repairs vs Improvements? Many investors get this mixed up – please explain.
12. What are the rules around tax deduction for visiting an interstate investment property? Is this still claimable?
13. Timing the market – many investors are fence sitters when interest rates are high. They think that by waiting for the interest rates to decline that they are being smart. But given the severe shortage of property across Australia, and price growth occurring in most markets, wouldn’t it make more sense to buy now – cop the higher interest rates (which are tax deductible) and get in before the market price rises higher. Example – purchase price now is $900k paying 6% mortgage rate. If you wait 12 months – market price might rise to $1m – ie $100k capital gain!  Yet even if mortgage rates drop say 1% and you borrow the entire $900k against other equity – you are only saving $9000. But missing out on $100k growth!!
14. What are some tax tips you can share with savvy property investors at this time of year?
15. What were the biggest investment mistakes you see some property investors make?
16. If you had $1M in equity what would you do with it in today’s market?
17. What are some higher yield strategies you have seen smart investors use to get positive cashflow returns?
18. Can you share the best piece of investment advice you’ve ever received?