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  • mkbonline
    Participant
    @mkbonline
    Join Date: 2012
    Post Count: 17

    This question came up while discussing Negative gearing concept with an Indian colleague.

    Can Australian Resident claim Negative gearing benefits from overseas property investment in below mentioned scenarios?

    Scenario 1 – Buy an existing house (constructed and ready to rent out). Use PPOR equity to buy overseas property i.e Loan from Australian Bank. Rent the overseas property and bring rental income to Australia.
    Negative Gearing = Rental Income – (Interest paid to Australian Bank + Expense of overseas property maintenance company + Expenses to bring rental income to Australia like bank transfer fees)

    Scenario 2 – Buy an existing house (constructed and ready to rent out).Take loan from overseas bank (assuming they give loan).Rent the overseas property and bring rental income to Australia.
    Negative Gearing = Rental Income – (Interest paid to Overseas Bank + Expense of overseas property maintenance company + Expenses to bring rental income to Australia like bank transfer fees)

    Scenario 3 – Same as Scenerio 1 or 2 but leave rental income to Overseas account.

    Scenario 4 – Same as Scenerio 1 or 2 but buy off the plan or under construction property which will be ready for in a year or so

    PS – I understand there is DTAA (Double Taxation Avoidance Agreement) between his overseas country and Australia, so tax from property rental income will be paid in Australia

    Cheers,
    MKB

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Yes. all those scenarios would be possible.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    mkbonline
    Participant
    @mkbonline
    Join Date: 2012
    Post Count: 17

    Meaning Australian Negative Gearing benefits can availed in all scenarios? Can you recommend any Tax Accountant in Sydney who have experience in Overseas Property Negative gearing?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Try http://www.houseofwealth.com.au

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    mkbonline
    Participant
    @mkbonline
    Join Date: 2012
    Post Count: 17
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