Season 4 Episode 58: Tax Benefits and Tips for Your Investment Property

Open Corp CEO's Cam McLellan and Al Lewison discuss the financial impact of property investing on lifestyle, with a focus on taxation strategies to mitigate costs. Key points include:

Lifestyle Concerns: Many people avoid investing due to fears that property investment will impact their lifestyle, such as limiting holidays or dining out. However, with proper strategies, investments can be managed without sacrificing lifestyle.

Negative Gearing: Negative gearing allows investors to offset property holding costs (such as interest and repairs) against their taxable income, reducing the amount of tax they pay. This can make holding an investment property more affordable.

Tax Depreciation: Depreciation schedules allow investors to claim deductions on the value of the property’s building and fittings over time, reducing taxable income. New properties have higher depreciation benefits, making them more attractive from a tax perspective.

Tax Withholding Variation: A tax withholding variation form can be used to adjust the amount of tax withheld from an investor’s salary, allowing them to receive the tax benefits throughout the year instead of waiting until their annual tax return.

Finding the Right Accountant: It's essential to work with an accountant who understands property investment. Not all accountants are familiar with the specific tax deductions and strategies related to property investing.

Repairs vs. Upgrades: Investors can claim repairs as tax deductions but should be cautious when making upgrades, as these may not be immediately deductible.

The conversation emphasizes using tax benefits to maintain a good quality of life while growing a property investment portfolio. It also encourages consulting knowledgeable accountants and using the right financial tools.

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