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Property comes with another very large benefit, tax
right offs. Tax laws do differ in different countries.
Depreciation - you offset the building and
the chattels against tax through depreciation. The depreciation rate
can vary in many ways, but in most instances it should be enough
make your property investment negatively geared.
Negatively Geared - if your income from
your property is less than your expenses, then you are losing money.
Because the depreciation can be so much, it can actually make a loss
on paper. Although when in actual fact the building is increasing in
value. If you are negatively geared, then you can even save money on
your income tax.
capital gains tax - when selling a
property in most countries you have to pay a capital gains tax. This
means that you have to pay tax on the amount that your house
increased in value. The way to get around is this is to put the
money into a more expensive property, and then you are just
transferring properties. |
