One of the industrial ways of achieving a superior income tax refund is to have a negative geared rental property.

Negative gearing is a concept accepted in tax law where the expenses of owning a rental property are greater that the rents received. The expense of negative gearing is an allowable deduction in your Australian income tax return.

Rental property has two income streams

Tax refund generated when applying the negative gearing (Rent less expenses) against your salary or business income.

The second is the value of land. The rental property on sale may yield a capital gain.

The combined effect off investing in a rental property is a net gain of capital for the taxpayer.

Depreciation is available for the building of the rental property and the fixture and fittings. Rules apply around the availability of this non-cash tax deduction.

Unlike superannuation there are minimal restrictions in negative geared rental property. The taxpayer is at all times able to make decisions regarding the property such as renovations or sell the property.  Real Estate Agent have created an industry of finding tenants and maintaining the property and associated paperwork. At year end this information is summarised and made available for inclusion in your tax return.

Wealth creation occurs because people act.

Negative geared property offers a you an opportunity to become financially secure. Make this opportunity work for you call Peter on 08 82390135 to discuss your plans.


Have you maximised the deductions available?

The cost of any structural improvements from, 27 February 1992 can be deprecated. Building cost from 1985 can be deprecated as well.

Have all the fixture and fittings in the rental property been listed for depreciation?

Has your property been independently surveyed for structural risks?

Negative gearing from rental property will reduce your taxable income increasing the refund.

Depreciating the cost of building (obtained from Quantity Surveyor) will maximise your negative gearing non-cash tax deductions.

Depreciation of fixtures and fittings is also available providing the taxpayer hold the tax invoice for the assets purchased. This includes furniture, stove, hot water, air-conditioner etc. If the house is let fully furnished that all the furniture can be depreciated as well.

Don’t forget that landlords have a legal responsibility in South Australia to supply working smoke alarms in all rental properties.

In South Australia white ants are an additional risk to your rental property, ensure regular assessments of the risk occur and claim it back on tax under pest control.

Email Peter Geddes or phone 08 8239 0135 to discuss changes to your rental property