As of July 1 2017, you can no longer claim the depreciation on fixtures and fittings for existing properties, however this tax deduction is still available when you buy a new property – either complete or short-term off the plan.
And if you do buy a short-term off the plan house and land package, you will only be paying stamp duty on the land and not the value of the home – which can save about 70 per cent off the stamp duty that you would pay on an equivalent complete house.
Furthermore, with a house and land package you can claim interest for the six to nine months that you are building the property and not receiving rent, giving you a huge tax deduction.
The result is a brand new house with a builder’s warranty of up to 30 years, a one or two year appliance warranty and full depreciation for both building and fixtures and fittings.
This strategy can save you $60,000 to $80,000 in taxes and stamp duty in the first five years of ownership, when compared to buying an existing property.
As always check with your accountant and investment finance broker about how these concepts would apply to your unique financial position. Start by booking a complimentary 60-minute consultation with an inSynergy professional property investment and tax advisor.
Important Note and Warning: This information is general in nature and should not be considered personal tax advice. We highly recommend you discuss these concepts with your accountant, property investment adviser and investment finance mortgage broker jointly to ensure any considered concepts are suitable for your personal financial situation, as one effect of the concept may negatively impact another part of your plan.