Desperately need to lower our tax!!

Seek out an independent financial planner as direct property may only be part of a balanced solution.

SNM

If you want to get into property but don't know enough about it, consider using buyer's agents. A good one will know what property to buy for the specific reasons. This is a few thousand dollars well spent rather than shooting blindly in the dark (but luck in finding good planner/agent also at play of course).

Don't be afraid of dumping professional quickly if you don't feel comfortable with them.

If the financial planner you talk to tries to talk you out of property but into managed funds that he sell (usually with massive tax deduction), don't just walk away. run as fast as  you can!

Hartfam,

These things come at a price. In the past they have been low performance (if perform at all) investments – You prepay some on-going costs (where the deduction comes from), he get a nice commission, and you expose yourself to often high-risk and elaborate financial scheme that designed only to benefit every one in the selling chain but the actual paying buyer. Sometimes they'll also advise you to take out a loan and prepay the interest (more deduction). It smells like this – borrow/invest $100,000, you get $50,000 deduction… bla bla…. mature in 5 years… bla… can't guarantee… bla… but it's a fantastic investment for someone like you who make so much money… bla bla…

In 2005/6 my accountant invite me to a "launch dinner" at Sheraton hotel in order to sell me one of these funds and a few other "agricultural schemes" including Timbercorp (which has since collapsed). I'm not saying funds are not good, nor am I saying they don't deserve commission, but if it feels like it's designed to lure novice investors, be very careful.

After the GFC I hope the landscape gets cleaned up a bit.

Lastly, count your blessing that you're paying bucket loads of tax. I wish I could be doing that. Within immediate term (this FY) obtaining tax deduction should be seen as a bonus in devising a long term investment strategy, and not as the primary aim (if so just donate the money to a charity – that always give some people satisfaction and is a good spiritual investment). That said, if chosen properly, negetive geared properties are often the most sensible way to achieve this. Anything else (such as shares/funds), you probably won't want to borrow too much and borrowing to obtain tax deduction is just downright risky.

Or take more holidays and try to forget about how much tax you pay… AUD is high and a trip overseas costs about 40% less than earlier this year.

Hi Hartfam, just one thing about shares/manged funds, you'd be hard pressed to invest in shares that pay less than the current interest rate anyway. Banks etc currently have a yield of about 5-6% fully franked, which is 7.14 – 8.57% after franking credits are added in. Your loan interest may well be less than that if you use a home equity loan, so it won't do much to reduce your tax. All you could do is pre-pay interest for one year if your income is going to drop drastically next f/y. It's still chicken feed compared to your wage though.
 As for property, for some perspective, say you buy a new IP for 420k, you'll be getting tax credits of about 6k on a 250k wage, ie that's how much your tax will be reduced for one property. That will fade quite considerably after a few years, and may even be zero after a decade at which time you'd rather have the props in your name as the lower incomer earner.
There isn't much difference long term between having the properties in your name or your partner's when you bring it all back to net present value. You {save tax now, but pay more later} or {carry forward losses now and pay less tax later}. Most of us put it in the higher income earner's name to make it more affordable at the start, but that shouldn't be an issue with you;) You should have it in a trust as Terry says, which will have much the same tax situation as having it in your name (with net losses having to be carried forward in the early years), with the added benefit of asset protection.

Salary sacrifice to the limit into super, but that's now chicken feed as well thanks to the latest changes.
Best wishes, nice problem to have, S/C