How property investors can reduce the taxation burden

By Michael Mata | 13 Feb 2017

Property investment may have the potential to provide great returns; however, exorbitant stamp duty costs have become increasingly burdensome for even the most intrepid investor.

Property investors who purchase an average home in Sydney or Melbourne are likely to pay more than $30,000 in stamp duty costs—the equivalent of buying a new SUV.

The governments of NSW and Victoria are currently raking in huge earnings from property taxes, and this is likely to continue into the foreseeable future as property prices are expected to rise in Sydney and Melbourne.

On the other hand, it is worth remembering that in less dynamic capital city property markets, investors are being hit hard by hefty taxes. In Perth, for example, the average property investor has to settle over $17,000 in stamp duty.

Overall, all levels of government rake in more than $45bn annually in property taxes.

Since 2010, annual property tax collections by the government have increased by 42% throughout Australia. In contrast, total GST collections have increased by a mere 17% since 2010.

To ease this large taxation burden, more and more property investors are taking advantage of legitimate tax benefits that flow from investing in property. In fact, just one tax depreciation report for an investment property can generate thousands of dollars in potential tax savings annually.

Tax depreciation benefits associated with owning investment properties can be equivalent to approximately 60% of the annual rental income of an investment property. For the initial cost of a tax depreciation report, clients can enjoy thousands of dollars in tax benefits each year from their investments by legitimately claiming their full depreciation allowances.

Related stories:
Rising Stamp Duty Rates Are Blocking Homeownership In Sydney And Melbourne
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