I recently landed on a job which puts me in the highest tax bracket. While loving the salary I would love to invest in property and this way minimize my income tax. I do have few concerns however:
– living in Sydney should I try to get into local property market and get myself a PPOR? I do not have enough money to pay for deposit here but would love to take an advantage of FHOG + new no stamp duty rule. This property could than be used as -ve gearing IP reducing my tax burden.
– or should I rather look for a +ve cashflow property elsewhere while renting in Sydney?
I know that there is no simple answer to my questions and effectivelly it will all come down to an investing strategy I would feel most comfortable living with. Having said that I would still love to hear some opinions from more experienced property investors.
Cheers
Dan
Dan,
Find out if the company you work for offers salary packaging. That is a quick and easy way to get your gross wage down a tax bracket or two. Hubby and I are looking at salary packaging our mortgage payments and it will save us $4000 a year in tax when we do manage to organise it!!!I think the ruling is that you can salary package up to about 30% of your gross income.
I am not sure about the rest of it as I live country WA where houses are worth a window in Sydney.
Good luck and happy house hunting.
StephSuccess is 1% inspiration and 99% perspiration.
Hi Dan,
At the end of the day you need to go with your beliefs – however you need to consider the first priority when investing in property is to make money, either through growth or income – saving tax is a secondary consideration for me.
On a related matter access to FHOG should also be seen as a bonus and not the main reason for investing in the local area. Sure if the local area is a sound investment area and you can use the FHOG legislation to your advantage then go for it otherwise you need to consider your short and long term goals and act according to these.
My preference is for good growth in major cities where there is more likelihood of sustained growth being achieved. While I have serviceability and equity to use then that is where I will continue to invest.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
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