Guys
I am also new to property invtestment.
But I also think if you are high income earner,
you might probably have a portfolio of +ve and -ve geared properties mixed .Because if you only have +ve cash flow properties in your portfolio,you will be paying tax – 48.5% on your cash flow. That is quite a lot.
Why not use this cash flow to fund the -ve geared properties in high growth area such as capital cities.
I mean the cash flow will offset the loss on the the -ve geared property resulting no income tax.
That way you will be able to achieve and adjust both cash flow and capital growth
What do you think ?
111111
Hey there,
Ever consider sheltering your income by means of companies or trusts? I am looking into this currently!!
-ve geared property is a waiting game that relies a lot on opinions and speculation, with little or no facts!! U have more control over your assets when managing +ve geared property!!
At the end of the day, no matter wot strategy u take, u should focus on buying undervalued property!! This way u can have a choice, furthermore, capital gains are already made without waiting and relying on market forces!!
Hope this helps!!
Alex
“Successful people make their profits when they buy, not when they sell”
Guess it depends on what you want to achieve 6×1.
If you want to retire sooner will the -ve geared help or hinder. You may want to only go for positive geared to replace income or use -ve geared as a growth strategy to pay down debt later.
Answer is it depends on what you set out to achieve. The joy of this game is there are no rules except to enjoy what you do.Enjoy
AD [:0)]“A successful person is one who can lay a firm foundation with the bricks that others throw at him.”
-David BrinkAlex and AD
Thanks for your comments.
I am not against +ve cash flow props and either I am not pro -ve geared props.
I am just learning from experienced investors.Alex
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-ve geared property is a waiting game that relies a lot on opinions and speculation, with little or no facts!! U have more control over your assets when managing +ve geared property!!
**********************************************What about the hosue price indexes issued by the real estate institutes ?
if you look at the history, house prices doubled every 10 years in capital citiesAre they facts or opinions ?
AD
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If you want to retire sooner will the -ve geared help or hinder. You may want to only go for positive geared to replace income or use -ve geared as a growth strategy to pay down debt later.
**********************************************What should you do if you earns high income (ie at 48.5% marginal rate) and
are still quit far away from retirement. Will you be happy to pay your income tax at high rate ?[
]111111
I am also new to property invtestment.
I have read from this forum alot about +ve geared properties.
I am in the same boat with 111111, or even a bit slower to understand the concept og +ve geared
1) I like to ask the same question about continue to pay tax at 48.5%?
2) Where can we find these properties in Sydney? I went to a suburb 3hr drive from Sydney and it is stil -ve geared.Hey 6×1,
I am both of those and I purchase through a structure to minimise the tax and maximise the protection. Even if I had to pay max tax…..I’m still making money.Enjoy
AD [:0)]“A successful person is one who can lay a firm foundation with the bricks that others throw at him.”
-David BrinkAD
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I am both of those and I purchase through a structure to minimise the tax and maximise the protection. Even if I had to pay max tax…..I’m still making money.
****************************************I presume you set up a family trust to minimise the tax. I beleive it is to minimise the INCOME TAX.
In that case, you will be paying the income tax at 30% (ie. compayny tax rate) opposed to the personal income tax.
But, when you sell your property, what happens to the CGT rate?
I beleive there is no discount on CGT when the property was first purchased thru family trust.
(I mean you can have a 50% discount on CGT when the property was first purchased individually by your name.This may result in a huge tax bill when you sell the property purchased thru trusts.
Is it right ?
[
]111111
Hey there 6*1,
As i said it is a waiting game!! In the long-run (over 10 years) u might be right that house prices will go up or even double. But to me that is being too reactive!! If u r reactive then u r never in control. In ten years i could get my money back almost ten times, and therefore, have 10 houses with the prospect of capital gains.
See, when the 10 years are up i would have to say i have had more options/control on the way.
If you are doing it for tax purposes then it would seem a waste of time if your prediction is not absolute!!
I agree with AD where a mixture, in the right circumstances, seems like a safer and less risky bet. Furthermore, it would be reasonable to suggest today’s economic climate is one of those circumstances.
All i can say, u have to be doing it for the right reason at the right time!!
Thanx again
Alex
“Do what your hart say as u will be criticised either way u turn”
Hi 6*1
As I umderstand the CGT rules your PPOR is exempt from CGT, and you can only nominate one PPOR.
So any IP’s, whether held in your own name or in a trust or company, if disposed of will attract CGT. There is a 50% discount of CG if the asset has been held for more than 12 months. Have a look at the Australion Tax Office site for the official info.
Don’t be hung up over paying tax. I would love to be paying say $300k in tax; imagine the income I would be keeping using legal minimisation methods.
TerryTerry
Finance111 plus 111
just remember one other little thing. The ATO has ruled that for CGT purposes you have to hold the assett for a year, meaning that you have to allow one day at the beginning to purchase it and one day at the end to dispose of it, thus you need one calendar year plus 2 days as your hold time to get the 50% CGT rebate.
the Bruce [
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