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Hi there Waylo1, welcome!
Ok, let me preface by saying I am not an accountant, so this is just from personal experience… You can claimed all the money spent on holding the property (expenses) including interest, rates, management fees etc, above and beyond the rent received (income). You can also claim the costs associated with the purchase (pest inspection, conveyancer, etc).
You may also be able to claim depreciation on any new items in the property for the duration of the tenancy – was the kitchen newly renovated or a new shed put on the property prior to you buying it. Alternatively, if there is anything you plan to improve and are in the position to do so, maybe weigh up the option of doing it now so you can depreciate it for a while.
You will not pay capital gains tax on your home should you need to rent it out prior to selling unless it is rented out for longer than you lived iin it, and should that ever happen you can apply to transfer the cgt to you current home and then provided you live there for 7 yrs you will still avoid it! CGT is very confusing – trying to get a straight answer about our particular situation showed me that.
I would strongly suggest getting a good accountant who invests in property.
Good Luck with it all
hmmm… To my knowledge;
'negative gearing and tax breaks' means the property is actually COSTING the investor money over and above what the poor tenant is paying…
the government put these tax systems in place to encourage those who could afford to buy to supply housing for those who can't or chose not to pay a mortgage…
the increase in mortgage repayments are far greater than the increase in rent over the past few years AND it is still cheaper to rent over the course of a lifetime than to buy…
AND, if investors stopped buying then there would be nowhere for renters to live and basic 101 Supply and Demand dictates that fewer properties for rent means higher rents, so Wynard, I am not the most highly educated person around but I would dare to suggest that higher house prices and higher rents come from a shortage of both.
I would also like to push the friendship to suggest that higher interest rates are part of the reason for less investors buying homes for renters, and possibly for some rent increases and that maybe those who AREN'T under mortgage stress were running around out there last year with their credit cards in a spending frenzy, prompting the Reserves Bank to try and rein in the big inflation monster by increasing said rates….
So who is really to blame here??!?Seriously, there will always be tenants, there will always be landlords, and there will be good and bad apples in both. There will always be those people with a bit of 'get-up-n-go', looking for a better life, as there will always be the victims, looking for someone to blame for their lot in life…
I am a Property Investor, and yes, a Landlord. I have worked harder than most to get here and I am proud of what I have achieved thus far and excited about what else there is to come. I am a good, no, FANTASTIC Landlord – going above and beyond to ensure my tenants are comfortable and happy and it costs me. I have also been totally taken advantage of on a few occasions and had to walk in to properties that look like those roach-infested nightmares they show on current affairs programs from time to time with human excretea smeared on the walls. But I clean up and keep going. I am highly passionate about property – I love it!
So please forgive me Wynyard, if I took your original post personally and may I suggest to you that slamming Property Investors and blaming them for ruining our great country, and for your lot in life, on a Property Investment forum was a little bit … well, rude!
And I won't even get started on the Entrepreneurial "go-getter' spirit that built this great Country…If you'll excuse me, I have to go research some companies to put a new carport on my Broken Hill Property to thank my tenant for being so great and paying her rent on time. She pays $130 per week by the way, even though I could charge her the market rate of $160…
Good Luck finding somewhere to live – I hope your new Landlord gives you a reason to feel a bit more friendly towards us Investors.
