Investment strategies personalised to your goals.

There were some media pieces in February 2024 suggesting that the government was looking at changes to the taxation of property investments, however, later that month the Treasurer publicly stated that the Albanese government was not looking at any changes to the taxation of property investments. In the May 2024 federal budget, no changes to negative gearing were announced.

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As an interesting historical sidebar, back in July 1985, the Hawke Labor government effectively abolished negative gearing for all future rental property investors. The reform essentially quarantined any losses made from owning rental properties. This meant that rental property losses could not be used to reduce tax on other sources of assessable income. However, losses could be carried forward to offset against future rental profits and reduce taxable gains made from other rental properties.

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The result of this policy was that landlords left the investment property market, the supply of available rental properties was reduced, which had the effect of driving up rents in some parts of the country. In addition, public housing waiting lists increased by around 20% in this time. The government of the day understood that it is far cheaper for them to provide housing through the private sector, offering tax breaks to investors than it would be to spend Billions on a huge public housing build.

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The Hawke Government reinstated full negative gearing in 1987. Having been there once, it would be a brave or incredibly stupid government that would make this same mistake again.

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This is a great question.

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Firstly, the rent paid by the tenant will cover most of the property holding costs, so you only need to determine the difference between the rent you receive and the monthly mortgage payment. We advise our clients to keep a buffer available for times like this so that if an emergency arises, you have at least three months of mortgage payments that you can draw down on. Sometimes, we can borrow a little extra when financing the property and put the additional funds in an offset account so you're not paying interest. Still, they are there for a rainy day.

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Secondly, I would point investors to an insurance product called Income Protection insurance. This is an insurance policy that you take out that pays you an agreed percentage of your salary over a defined recovery period should you become ill, injured or incapacitated and cannot work for some time. This cover is relatively affordable if you are younger and becomes more expensive the older you get. You can take out this insurance coverage personally or talk to your superannuation fund's financial advisor. Most superannuation funds offer Income Protection insurance to their members, and one significant aspect of this is that the insurance premiums can be paid from your superannuation savings account and not out of your pocket! This should give you adequate peace of mind, as it de-risks your property investment.

No, not if you structure your investments the right way.

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Land Tax is a tax levied by State or Territory on property owners. Tax rates and thresholds are different in each State or Territory. Land tax applies to residential properties not used for owner-occupied purposes and commercial properties. Some properties are exempted from the land tax net, usually comprising rural and agricultural land, crown land, land owned by governments, and not-for-profit entities.

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The value applied to a property is the assessed land value for land tax purposes, which is determined by the valuer general in each State or Territory. Note that this assessed land value is usually significantly less than the actual market price paid for land by investors.

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Many States offer a threshold value below which land holdings are not taxable. In many States, these thresholds are not indexed to inflation, so as property values rise, more properties are caught in land tax nets.

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By strategically spreading your investments across States that offer generous land tax thresholds, you can ensure that you avoid paying unnecessary land tax on your property investment portfolio. This approach empowers you to take control of your financial decisions and maximise your returns.

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In 2022, the socialist Palaszczuk Queensland government attempted to tax investors based on the value of land they owned Australia-wide. If that land value exceeded the QLD land tax threshold, investors in QLD were to have been taxed on the value of their land holdings in QLD at the rate applicable to the total value of land owned Australia-wide. Thankfully, this move was defeated after other State governments refused to share land ownership data, and the QLD government was forced to abort its socialist initiative.

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The socialist Andrews government in Victoria, without any prior notice, abolished that State’s $500,000 land tax threshold, reducing it to just $50,000, meaning that all those who had previously invested in property in Victoria, with appropriate tax planning to remain under that State’s land tax threshold will now be subject to paying land tax in Victoria from 1 January 2024. Because of the socialist cash grab, purportedly to pay for the $ 1 billion they wasted during the pandemic, I am advising all of my property investment clients not to touch Victoria when considering where to invest. This land tax move is only meant to be for ten years, but let’s face it, when has a government with solid tax revenue ever kept a tax temporary? Remember the NSW 3x3 fuel tax. Three cents per litre for three years, and they would have all of NSW’s roads fixed. After three years, the messaging was that the roads had improved, but there was still more work to be done, so the tax was extended for another three years. After six years, the messaging was that the NSW government never guaranteed the public that every cent of 3x3 would be spent on roads and that the funds were needed for other purposes. Tax permanent.

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With investors in Victoria either raising rents or divesting their properties to avoid the increased tax, the real estate market in Victoria is likely to experience shifts in supply and demand. This highlights the potential impact of land tax policies on property values.

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Despite the challenges in Victoria, there are still States that offer reasonable land tax thresholds for investment. NSW, QLD, SA & WA continue to provide promising opportunities for property investors, offering a sense of optimism and hope for your investment strategies.

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The great news is that engaging me to provide expert advice on property investing will cost you nothing out of your pocket. My remuneration comes from commissions from the lender for placing your loan with them and referral fees from the property partner I work with to find an appropriate property for you to invest in. Lenders pay brokers an up-front commission after a new loan settles and a small monthly trailing commission for as long as the loan remains with that lender. Referral fees are a one-off payment.

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Expert taxation, finance, and structuring advice are priceless, and applying this valuable advice will make you significantly more wealthy over time. This, costing you nothing out of pocket, is a brilliant value proposition for you.

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Let's dive into the nitty-gritty of property investment taxation. Your rental income and operating expenses fall under what's known as the revenue account. The difference between your rents received and annual expenses can result in either a taxable income or a tax loss. This figure is then applied to your overall taxable income. If you end up with a tax loss on your revenue account, it can be deducted from your other income, reducing your annual tax bill. This tax saving can then be used to make your property investment more affordable to hold.

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The second aspect is what is referred to as a capital account. This is the cost of buying your property, plus stamp duty and legal fees, plus any improvements you make to your property. Here’s the beautiful thing about investing in property…. As the value of your property goes up each year, you are not taxed on your capital gains until you sell the property and physically realise the gain. The sales price, less agent’s commission, and less legal fees are your net sales proceeds. Take away from this figure your capital cost, and you have your capital gain. This gain is discounted by half, which is applied to your taxable income for the year to determine how much tax you need to pay on your capital gain. It is possible to tax plan in your retirement years, when to sell your properties, to minimise the tax you will pay on your gains.

Because I am a professional CPA accountant, a licenced tax agent, a licenced Mortgage Broker and a Registered SMSF Auditor. I am passionate about helping people break free from the poverty cycle that our tax and middle-class welfare systems are designed to induce. I am uniquely positioned to provide you with an ethical service backed by the full required mix of qualifications, knowledge and skills to advise on aspects of tax planning and finance structuring to ensure that you can make a safe, well-structured property investment that will minimise your taxes, pay off your home loan faster and build your wealth and your property portfolio over time.

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My service offering is not a one-size-fits-all approach. It is a comprehensive package that includes personalised tax structuring advice, finance structuring advice, property identification, and property modelling. This tailored approach is designed to meet your unique financial goals and circumstances, making you feel valued and understood.

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I am not here to sell you a product. While product selection is a part of my service, I will never pressure you to make a purchase. The decision to proceed with my services, or not, is entirely yours. My goal is to earn your trust and become your long-term partner in wealth creation and financial structuring. This commitment to a lasting relationship should instil a sense of security and confidence in my services.

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Instead of dealing with me, you could choose to deal with an accountant, a mortgage broker, a quantity surveyor and a real estate agent, coordinating all of these to achieve your investment outcome.

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I can work for you, coordinating service partners to save you all the running around and stress.

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In answering this question, I would ask: what’s your main goal? If you are after rental return, investing in some regional property markets will allow you to achieve a high yield. Still, these markets will likely result in lower capital growth over time. Suppose your main goal is capital growth with acceptable rental yields. In that case, I recommend investing in growth corridors close to major cities. Look for locations with solid population growth and good infrastructure.

The typical answer to this question is 'ten years ago'. There is a saying in the share market that is equally applicable to real estate. Forget timing the market; time in the market is the most important. Few people are knowledgeable enough to time an investment and exit from a real estate investment.

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Trying to do so is effectively speculating and can cost you dearly.

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During COVID, I was convinced that property prices would tank.

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Had I sold property at the start of the pandemic and planned to buy back in after, I would have missed out on massive gains. In real estate, one rule holds. Historically, real estate values have increased over time. Property investment is not a Christmas to Easter-type investment. Consider an alternate investment vehicle if your investment timeframe is any less than five years. Just act now to buy a property, and you're on your way to wealth creation.

I am not a licenced real estate agent, and I do not sell properties.

The properties offered to my clients are sourced from properly licenced third parties across Australia who provide details on suitable properties for me to consider as investments. I take the data provided on the subject property and enter that information into a financial model based on your personal circumstances.

I then discuss the aspects of the property with you, including your unique weekly cost of ownership, and then leave you to determine whether you are interested in proceeding with the purchase. If you decide to proceed, I will then liaise with the third-party property provider, who will prepare contracts of sale for you to sign.

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No. While many people wait until the end of the financial year to receive a fat refund cheque, many property investors receive their tax refunds during the year, which helps cash flow their mortgage payments. For people employed under the PAYG system, applying to the ATO for a PAYG Withholding variation is possible, which instructs your employer to deduct less tax from each pay, leaving you more cash in hand to meet your monthly mortgage payments. For self-employed people, you can vary your PAYG Instalment amount to pay less tax each quarter of the year.

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It's crucial to note that there are specific eligibility criteria for these variations. Therefore, we strongly recommend reaching out to your accountant to discuss your individual circumstances and ensure you're making the right financial decisions.

Put simply, owning an investment property builds your wealth and provides you with financial options that you control for your future. If you are an employee, the Commonwealth government taxes your employer, forcing them to provide for your retirement via the Superannuation Guarantee Charge. Whilst superannuation savings will be available to you in your retirement, politicians can change your right to access your superannuation savings, and the amount of those savings can be changed at whim. The government has already raised the retirement age at which you are allowed to access superannuation. With increasingly greedy socialist governments spending more than governments receive in revenue, ramping up the national debt, in future years, cash-strapped governments will look at your superannuation piggy bank as their cash cow. Already, moves are being made to restrict how much people are allowed to have in superannuation savings, and additional taxes are being applied to people’s superannuation savings, which were never discussed previously. My point is that relying on one bucket of government-controlled retirement savings leaves you at the whim of increasingly greedy politicians with increasingly socialist attitudes.

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Having a second source of wealth that sits outside the superannuation system is not just an intelligent risk management move but also a pathway to financial freedom. You own the properties. You decide how many to own, you choose to sell or keep the properties, and when you will access your wealth.  This sort of flexibility allows you to plan for how much income you will have in retirement, when you choose to retire, where you choose to retire, or whether you want to access your wealth earlier to achieve a life goal, like realising your gains to buy that waterfront property you always dreamed of. The power to choose is in your hands, giving you the freedom to shape your retirement according to your aspirations and dreams.

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Property investing is not just a simple form of investing but also a tax-efficient strategy that allows you to legally minimise your tax and use those tax savings to maximise your wealth safely. ‘Safe as houses’ is the saying. The late, great Kerry Packer is on record as saying, ‘of course, I am minimising my tax, and if anyone in the country doesn’t minimise their tax, they want their heads read because, as a government, I can tell you that you’re not spending it (our taxes) that well that we should be donating extra’. If it’s good enough for who was then Australia’s richest man, tax minimisation is good enough for you! By understanding and implementing these tax minimisation strategies, you can take control of your wealth and ensure its safe growth over time.

I’ll start by saying that such an event is extremely rare. Ultimately, though, this is a risk management issue.

Your first line of defence is a good property manager. They vet applications from tenants, and many property managers have access to tenant databases, which ‘blacklist’ tenants who have done damage, not paid rent or skipped out on leases, making it extremely difficult for them to get a tenancy again.

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Lastly, I recommend that landlords consider landlord’s insurance, a specialist policy aimed at covering landlords for malicious damage and the cost of repairs and will also compensate you for rents foregone whilst your property cannot be rented out due to tenant damage.

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Yes. What you are asking about is a practice known as 'rentvesting', where the investor first buys an investment property in an area they can afford whilst renting and living in a location that suits their current lifestyle choices. With a foot on the property ladder, their investment property(ies) grow in value over time so that at a time of their choosing, they can use the equity generated to buy a property in their location of choice.

What you’ll need to buy your first property is adequate savings to pay a deposit, as well as the stamp duty and legal fees on your purchase. Like any other property investor, you are entitled to the full range of tax deductions applicable to property investors. Ensure you have the structure to use these, as they reduce your weekly cost of ownership considerably.

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Owning your home, which grows in value over time, is a good start. To be able to buy an investment property, you essentially need two things… Firstly, enough equity (or owned value) in your home to use as a ‘deposit’ on your investment property, and secondly, you need enough income to be able to borrow for your investment property, showing the bank that between the rents you will collect, and your income earned, you will have enough money to repay your loan without undue hardship.

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To build up enough equity, make extra repayments on your home loan whenever you can, and make cosmetic improvements to your home to increase its value. Adding a paved area and a pergola or changing internal space in your home that adds another bedroom may not cost a fortune but can significantly increase the assessed value of your property. Another technique I have seen used is selling a car and paying the funds received off the home loan to show enough equity for an investment purchase. After your investment loan is approved, you can always look at replacing your car.
On the income side, being intentional about pursuing pay rises in career moves, working overtime shifts if they are available or considering taking a second job (even if for just a year or so) to show additional income may be enough to get you over the loan servicing line.

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Lastly, be very careful with consumer debt. A credit card with a $10,000 limit could wipe over $100,000 off your borrowing capacity with the banks. Work to eliminate these if you have them!

Yes. While I am not licensed to give personal financial advice on superannuation, I can share the following factual information with you. 

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Individuals have the power to leverage their superannuation for property investment. This begins with conducting their own research on Self Managed Superannuation Funds (SMSFs) to determine if it aligns with their financial goals and needs. 

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An SMSF can be set up online quickly and cheaply by searching 'set up an SMSF’.' Alternatively, you can instruct your accountant to set up an SMSF for you after you provide them with written directions. Please note that most accountants are not licenced to be able to provide personal financial advice on setting up an SMSF. As such, your accountant may be unable to provide formal personal advice recommending that you set up an SMSF. A formal advice document from a licenced financial planner could cost up to $10,000. Your accountant can, however, act on a direct instruction from you to set up a fund on your behalf, should you decide, after doing your research, that such a course of action is appropriate for you.

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Should you get an SMSF set up, you can roll over your superannuation balance from your existing superannuation fund into your SMSF. This will be your deposit for your investment property. If you have enough money in super, you could simply use your superannuation savings to buy a property outright in your SMSF.

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Prior to embarking on the SMSF journey, it's crucial to consult your Mortgage Broker. Their expertise will help ensure that you have sufficient superannuation savings and contributions to secure a mortgage loan through your SMSF, if required. This step is essential for your financial security. 

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Lenders to SMSFs will look at the proposed rent on a property, plus your last two years' superannuation contributions, to determine whether your SMSF can repay the proposed loan.

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Before signing a contract to purchase a property through your SMSF, ensure the contract has a 'subject to finance' clause, with a minimum of 21- 30 days ( the longer, the better). SMSF finance deals always take longer to approve than regular home loans. If you cannot obtain the finance for whatever reason, you can cancel the contract without penalty. Consult your accountant on the name in which the property is to be purchased, which is the Trustee of the Bare Trust (see below) when borrowing or the Trustee of the SMSF when buying a property outright.

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For an SMSF to borrow for a property, it must establish a Bare Trust and enter into a Limited Recourse Borrowing Arrangement (or LRBA) with a lender. Some lenders offer standard documents that they have pre-vetted for this purpose. 

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Note that SMSF's cannot buy house and land packages, as the SIS Act requires that SMSF's buy a single identifiable asset. As such, SMSF's are only able to buy already constructed properties.

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While investing in property through an SMSF entails meeting certain technical requirements, it is a feasible option for most individuals. Always remember, with the right guidance from your accountant and a licensed mortgage broker, property investment can be within your reach.

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Lastly, before you set up an SMSF, ensure that you understand your responsibilities as an SMSF trustee and understand the rules associated with SMSFs – such as the Sole Purpose test, which means that neither you nor any close associates or family members can rent or otherwise benefit from the property owned by your Fund.

Yes! Consider this: a taxpayer earning $120,000 annually is liable for income tax and Medicare levy of $31,867 per year. Over a decade, this amounts to a staggering $318,670 of your hard-earned income lost to Commonwealth government income taxes. And that's not all-you still have to pay rates to the local Government, State taxes on fuel, and GST on almost everything you buy. This is why it's crucial to explore tax-saving strategies like property investment.

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Investing in property allows you to claim all your holding expenses and non-cash deductions like depreciation as tax deductions. When you generate a loss on holding a property, that loss reduces your taxable income, reducing your tax bill. You then take the refund on your taxes and apply that to lowering the cost of holding your investment property. You are reducing your tax bill and using what otherwise would have been taxed to invest in your future.

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Instead of paying more in tax to have it wasted on the Government's latest woke agenda, you can redirect your money to holding an asset that goes up in value over time, providing you financial options over your life journey and, notably, retirement. What's left after your passing will bless your children and future generations.

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No. Suppose you’re a homeowner with reasonable equity in your home. In that case, you can use that equity as a deposit on your new investment property. You can even borrow the extra costs you incur in buying a property, like stamp duty and conveyancing costs, so you don’t need to put any cash into your new property purchase.

No. When you find a property that gives you an excellent rental yield and know how to structure your property investment correctly, maximising the available tax deductions, you could own a property worth $800,000 for as little as $70 per week at the current interest rates. That’s less than some people pay each week for coffee.

As time goes by, rental income increases, lowering your cost of ownership. Interest rate cuts also reduce your cost of ownership. As these factors impact your investment, it is likely that, in time, your property will pay you each month. Then, it’s time to look at buying your next property….. 

As much as you want, really. It's a well-known fact that real estate increases in value over time. An $800,000 property today will be worth around $1,185,000 in 10 years, assuming a compounded annual capital growth rate of just 4%. That's a $385,000 gain or an average of $38,500 per year you didn't have to work for. As you build a portfolio of 3, 4 or 5 properties, you can see how your wealth can grow over time.

Yes. There's a little-known, 100% legal strategy called debt recycling. This strategy must be set up precisely in the right way to comply fully with ATO guidelines. We work with our clients to set up their debt recycling facility and train them on how to use the strategy legally. Over time, clients can recycle their home loan debt, the interest on which is not tax deductible and turn it into investment-related debt, the interest on which is tax deductible.

The effect of the tax deductions over the years, with the tax savings applied over several years to their home loan debt, results in a fantastic reduction to home loan terms and saves many borrowers hundreds of thousands of dollars in non-tax-deductible interest payments on their home loans. The loan term and interest savings will depend upon each client's unique circumstances. Still, factors such as income levels and the number of properties owned are significant. Over time, this strategy alone has the power to revolutionise an investor's financial situation, let alone the money they will make on their investment properties.