Stamp duty (also called transfer duty) is a state government tax levied on the purchase price of a property at the time of transfer. It is paid by the buyer and is one of the largest upfront costs in a property transaction — investors must account for it when calculating the total capital required. State …
Borrowing capacity for an investment property is determined by a lender’s serviceability assessment — a calculation that tests whether the borrower’s income is sufficient to cover the proposed loan repayments at an assessed interest rate, after all other financial commitments. Key inputs into a borrowing capacity calculation: Income. Lenders include base salary, bonuses (usually at …
Land tax is a state and territory government tax levied annually on the total unimproved value of taxable land held by an individual, company, or trust above a threshold. It applies to investment properties — not to an owner’s primary residence (with limited exceptions). State-by-state thresholds (approximate, check current rates):– NSW: $1.075M threshold (2025), with …
An interest-only investment loan requires the borrower to pay only the interest component of the loan for a set period — typically 1 to 5 years — without reducing the principal. After the interest-only period ends, the loan reverts to principal and interest, and repayments increase. Why investors use interest-only. The primary reason is tax …
An SMSF — Self-Managed Super Fund — is a private superannuation fund that gives members direct control over how their retirement savings are invested. SMSFs are regulated by the Australian Taxation Office and must comply with superannuation law. Can an SMSF invest in property? Yes. An SMSF can invest in residential or commercial investment property, …
Property depreciation is a non-cash tax deduction that allows investment property owners to claim the decline in value of the building structure and its fixtures and fittings against their taxable income. It is one of the most underutilised tax benefits available to Australian property investors. Two types of depreciation: Division 43 — Capital Works. The …
Rental yield measures the annual rental income generated by an investment property as a percentage of its value. It is one of the most important metrics for comparing investment property performance across different markets and property types. Gross rental yield = (Annual Rent ÷ Property Value) × 100 Example: A property worth $600,000 generating $580 …
A property investment strategy is a structured plan that aligns your property acquisitions with specific financial goals — income generation, wealth accumulation, tax minimisation, or retirement funding. Without a strategy, property purchases tend to be reactive, influenced by market commentary, and disconnected from the investor’s actual financial position. Step 1: Assess your financial position. Document …
Capital gains tax (CGT) applies when an investment property is sold for more than its cost base. In Australia, the gain is included in the investor’s assessable income and taxed at their marginal rate — but individuals and trusts who hold the property for more than 12 months qualify for a 50% CGT discount. Calculating …
Negative gearing in Australia occurs when the costs of owning an investment property exceed the rental income it generates. The resulting loss — the difference between income and expenses — can be deducted from the investor’s other assessable income, reducing their overall tax liability. Eligible costs. Tax-deductible costs on a negatively geared investment property include …
