Hi,
Could someone please tell me how to work out the tax break associated with a negatively geared property. I have recently (7months ago) purchased my first property (townhouse) in Brisbane and am wanting to work out whether I could afford to rent out the current property and purchase a house with the intention of starting a family. How much assistance would I get from the tax benefits of the investment property? I'd be most grateful for any assistance.
My parter and I are in the same boat, currently purchasing a house to live after being owner occupiers of an apartment for two years. (see my previous post).
I believe the tax benefits will depend on your income, the amount of interest paying on the investment, costs associated (eg strata fees, maintenance), but I would also like to hear advice from other (more experienced) people on this forum.
The simple way of working it out is to take your gross income and add to this the Gross rent you receive.
Then deduct from this new income figure the interest for the year all property expenses and the Depreciation and Building Write off from your Quantity Surveryors report.
Calculate the new tax payable on the lower income figure and the difference between the two is what you are likely to get back.
Remember Depreciation and BWO are non cash items so dont you anything.
Richard Taylor | Australia's leading private lender
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