Your Guide to Save Tax as Property Investors

One of the many benefits of investing in property is the ability to save on tax as a property investor. When tax time rolls around each year, you may be able to claim a range of different tax benefits to bring your bill down – sometimes by tens of thousands of dollars.

At Property Club, we help our members find the best ways to optimise the value of their investments and leverage their position to save on tax each year. This guide explains some of the tax-saving techniques you can use as a property investor, as well as a real-life example of Property Club members doing this in practice.

How Investing in Property Helps You Save on Tax

As an Australian property investor, there are a range of tax benefits which may be available to you. These benefits can be used to save on tax and ensure you are left with more money that can be spent on your investment portfolio.

Here are some of the key ways you can save on tax as a property investor:

• Interest – you can claim interest as a tax deduction on home loans that were used specifically for your investments.
• Depreciation – investment properties sometimes have a depreciation tax deduction built into their original price, as long as they were built after 1985.
• Rental costs – costs on rental properties including advertising fees, maintenance costs, cleaning, and land taxes can all be claimed as deductions at the end of the financial year.
• Holding costs – if you purchase land before a property has been built, you can claim the holding costs for that investment as tax deductions.

There are several other tax benefits that property investors can enjoy. When the end of the financial year comes around, it’s always recommended that you consult your accountant or an expert at Property Club to discuss your options and maximise your cost-savings during your tax return.

Example of Tax-Saving as Property Investors: Justin and Jenni Watson

Justin and Jenni Watson are Property Club members who have benefited greatly from the tax deductions available to them as property investors. Through the club, they invested in four different properties and have seen that portfolio appreciate significantly from $1.98 million to $3.35 million over the space of just a few years.

While having an equity of $1.37 million was a worthy reward for the Watsons, they were even more excited about the $250,000 they had saved in tax deductions over the same period of time. Tax deductions that they were able to claim because of their investment portfolio.

Justin and Jenni are now able to enjoy a passive income stream that will support them through their working lives and beyond. And because they are able to claim back tax on expenses such as depreciation, interest on loans, and maintenance costs, they will be saving potentially tens of thousands of dollars each and every year. Their success story points to the tax benefits of investing in property and how this financial endeavour can actually save you money in the long term.

Contact Property Club

Property Club is committed to helping its members find the best path to success as property investors. Part of this journey involves discovering tax-saving techniques for our members, so they can use that money on expanding their investment portfolios. To find out how we can help with your investment goals, contact the club today at enquiries@propertyclub.com.au.