Accounting for property investors |
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Property Investors and Tax Accountants
BT Corporate Advisory Pty Ltd specialises in accounting, tax and planning solutions for property investors. Over the years our Director has helped many different investors, from one property to multi property development portfolios.
Boris Feldman of BT Corporate Advisory Pty Ltd has a keen interest in property investment. Being an investor himself he knows and appreciates all the pitfalls and rewards that are associated with it. His sound advice will deliver value to your property portfolio and tax planning. Our extensive up to date knowledge of tax rules associated with the investment property has enabled us to develop a portfolio of services that meet the exact needs of our niche clients.
Boris and his team have mentored, advised and added value to many different property investors. Compliance with property investment can get quite complex and it is accountants responsibility to assist you to smoothly sail through it. Are you able to claim renovation costs to your property as a deduction or does it form part of your capital cost improvement? This is something we can advise you at a friendly meeting in our Malvern Office. A freshly made cup of quality coffee and treats are also on offer. |
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What is Negative Gearing?
Negative Gearing refers to the borrowing of money to acquire an investment and the interest and other tax deductible costs you incur exceed the income you receive from the investment.
Negative Gearing is commonly associated with rental investment properties; it can also be applied to other types of income-producing investments such as shares and managed funds using what is often called 'margin loans'. When talking about property investment, negative gearing refers to a situation when maintain the property (including mortgage interest) your expenses exceed the rental income.
Creating wealth through purchasing an investment property is a well established practice in Australia. The attraction of borrowing to invest is that it enables you to invest in property or other assets that you might not of otherwise have been able to afford. For individuals, companies, trusts and SMSFs the loss can also be offset against other assessable income and the tax benefit will depend on the marginal tax rate.
If you are looking to negatively gear a property, you need to understand some important points:
- Properties are expected to generate profits only through capital gains and the gains need to be greater than the total losses incurred over the course of the holding period. However, there is no guarantee that the value of the property will appreciate, or at least appreciate enough to cover your losses.
- Investing in property requires extensive planning and extra caution must be exercised when a property is projected to generate a negative cash flow. Tax benefits should not be the only reason for the property purchase.
- For taxation purposes, depreciation on the building could be tax deductible; however, the depreciation also reduces the 'cost base' of the property. The greater the depreciation you apply on your property, the lower the cost base value which may result in a larger taxable capital gain on sale.
- Negative Gearing isn't suitable for all investors. Although it may lower your tax liability, the tax implications will depend on an individual’s situation and the type of investment chosen. Negative Gearing implies a negative cash flow that you need to fund from other sources.
- You have to remember that the family home is a purchase from the heart while an investment property needs to be a purchase from the head. Location is the most important factor when buying a property. It is even more crucial when it is an investment property.
Are you earning high income and paying high income taxes?
BT Corporate Advisory Pty Ltd can assist in maximising your investment property returns and minimise your income tax liabilities. We are experts in combining taxation and wealth creating strategies that are tailored for your personal circumstances and offer innovative investment property taxations & structuring solutions to ensure that you grow your property portfolio in a tax effective manner.
Our services include:
- Completing Your Tax Returns for Your Rental Properties accurately, efficiently and for a reasonable tax deductible fee.
- Maximising Your Tax Refunds & Putting More Cash In Your Pocket By Claiming Every Property Tax Deduction That You Are Entitled To.
- Improving Your Cash Flow, Repaying Your Loan, Minimising Your Interest and Increasing Your Equity Faster.
- Improve Your Cash Flow by Submitting a Pay As You Go Tax Variation to the ATO to Enable Your Employer to Reduce Your Tax Instalments, weekly, fortnightly or monthly.
- Ensure That You Claim All Your Depreciation Deductions By Engaging The Best Quantity Surveyors In Australia.
- Establishment Of Self Managed Superannuation Funds To Enable You To Purchase An Investment Property, Borrow Money To Help Finance The Purchase, & Sell The Property TAX FREE When You Turn 60 or retire.
Property investment advisory and compliance work is interesting, challenging and rewarding for an accountant, and BT Corporate Advisory Pty Ltd in particular. There are many pitfalls and opportunities along the way to guide our clients in the right direction. We understand what it takes to progress from the small one property investor to a multi property portfolio owner.
Best of all we are here to guide you all the way!!! Talk to us today about your investment property and tax planning needs.
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