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Property Investment mistakes - Getting ownership wrong

 

The way to have a great investment is not just to focus on the property itself but also to think about the other aspects that can make a significant different to your bottom line.

 

Let's look at an example of how two difference approaches for the same property achieved different results. A common mistake couples make when purchasing investment propertiy is to purchase in joint names rather than considering what will be the most tax-effective ownership split.

 

Lets' assume only one partner is working and earns $100,000 per annum. If the property is purchased in joint names then the income and deductions will be split equally

 

                                                            Partner 1                                 Partner 2

Income                                                  100,000                                     Nil

Rental income $20,000                            10,000                                     10,000

Deductions - $40,000                               20,000                                     20,000

 

Taxable income                                     90,000                                      -10,000

Tax saving                                              4,000  per annum                     Nil

 

 

If the property is purchased in Partner 1's name only then the rent and deductions will be as follows.

                                                            Partner 1                                 Partner 2

Income                                                  100,000                                    Nil

Rental income $20,000                             20,000                                               

Deductions - $40,000                               40,000                                               

 

Taxable income                                     80,000                                      Nil

Tax saving                                               8,000 per annum                    Nil

 

 

By getting the structure right up front our couple were able to improve their potential tax savings  by $4,000 per annum or $20,000 over the next 5 years. 

 

 

Are you interested in?

  • Paying off your home loan and reducing personal debt?
  • Reducing your tax?
  • Creating wealth?
  • Having a plan for the future that will give you financial security and independence?
  • Replacing your income with a passive income stream?
  • Learning how to turn $80 a week into $300,000 - $400,000 in the next 10 years?

 

If you are then get started by completing our Property Plus Customer Action Form 

 

  1. MTA will conduct an initial financial review to determine your capacity and readiness to commence your financial plan
  2. If you have capacity to invest we will arrange for you to meet with our Property Investment Specialists for an initial overview and needs analysis.
  3. If you agree to go to the next step this will be followed by an in depth analysis of specific properties, investment performance, and tax-effectiveness for your specific situation, including recommendations and provision of investment report.  

Complete the Property Plus Customer Action Form  today.