DISCOVER WHAT COSTS AND TAXES APPLY TO BUYING, HOLDING AND SELLING A PROPERTY
Buying and managing an investment property is a great way to diversify your portfolio and can be a relatively stable option to build your wealth over the long term.
Before you buy, it’s important to understand the costs and taxes that apply to each stage of the property investment lifecycle, so you can stay in control of your finances.
PHASE 1: BUYING
In addition to the purchase price of the property, there are a number of additional costs to consider when buying an investment property.
These include:
Stamp Duty, which is likely to be your biggest expense associated with buying an investment property. It’s a State Government tax that’s based on the purchase price of the property and usually paid prior to settlement. You can often increase your loan to cover these costs. In some cases, first home buyers may be exempt from paying Stamp Duty or entitled to a rebate such as the First Home Owner Grant
Building and inspection reports, which should be completed prior to the sale to ensure the property is structurally sound and free of pests
Registration fees, which are paid to the Land Titles Office in your state or territory when you submit any documentation relating to your property
GST on the inspection and
Building and inspection reports, which should be completed prior to the sale to ensure the property is structurally sound and free of pests
Registration fees, which are paid to the Land Titles Office in your state or territory when you submit any documentation relating to your property
GST on the inspection and
Registration fees, which are paid to the Land Titles Office in your state or territory when you submit any documentation relating to your property
GST on the inspection and valuation of new properties
Legal or conveyancing fees, which will include professional advice on the transfer of title, property and title searches, and contract of sale
Borrowing costs, including loan application, establishment, settlement and drawing fees
Insurance including building insurance, lenders’ mortgage insurance and landlord insurance Your accountant and SF Wealth Financial Adviser can advise you on all the upfront costs associated with buying an investment property in your state and when they are due.
PHASE 2:
HOLDING For a property investment to give you good returns, you’ll need to think beyond your mortgage costs and rental income. Ongoing costs can impact on your
For a property investment to give you good returns, you’ll need to think beyond your mortgage costs and rental income. Ongoing costs can impact on your cashflow and your overall return on investment. These may include: Ongoing insurance costs Interest on your investment home loan and bank fees Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
Ongoing insurance costs Interest on your investment home loan and bank fees Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
Interest on your investment home loan and bank fees Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
For a property investment to give you good returns, you’ll need to think beyond your mortgage costs and rental income. Ongoing costs can impact on your cashflow and your overall return on investment. These may include: Ongoing insurance costs Interest on your investment home loan and bank fees Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
Buying and managing an investment property is a great way to diversify your portfolio and can be a relatively stable option to build your wealth over the long term. Before you buy, it’s important to understand the costs and taxes that apply to each stage of the property investment lifecycle, so you can stay in control of your finances. PHASE 1: BUYING In addition to the purchase price of the property, there are a number of additional costs to consider when buying an investment property.
These include:
Stamp Duty, which is likely to be your biggest expense associated with buying an investment property. It’s a State Government tax that’s based on the purchase price of the property and usually paid prior to settlement. You can often increase your loan to cover these costs. In some cases, first home buyers may be exempt from paying Stamp Duty or entitled to a rebate such as the First Home Owner Grant Building and inspection reports, which should be completed prior to the sale to ensure the property is structurally sound and free of pests Registration fees, which are paid to the Land Titles Office in your state or territory when you submit any documentation relating to your property GST on the inspection and valuation of new properties Legal or conveyancing fees, which will include professional advice on the transfer of title, property and title searches, and contract of sale Borrowing costs, including loan application, establishment, settlement and drawing fees Insurance including building insurance, lenders’ mortgage insurance and landlord insurance Your accountant and SF Wealth Financial Adviser can advise you on all the upfront costs associated with buying an investment property in your state and when they are due. PHASE 2: HOLDING For a property investment to give you good returns, you’ll need to think beyond your mortgage costs and rental income. Ongoing costs can impact on your cashflow and your overall return on investment. These may include: Ongoing insurance costs Interest on your investment home loan and bank fees Fees for your accountant and SF Wealth Financial Adviser to manage your tax return, depreciation, rental income and expenses Utilities such as council rates, water, electricity, gas, broadband, Pay TV, strata fees and taxes Management fees for the real estate agency managing your investment property Maintenance and repairs on the property, as well as any renovations to upgrade the property and increase your rental returns Advertising fees to attract new tenants, as well as travel and accommodation to inspect the property Taxation costs Many of these costs can be unpredictable, so it’s important to prepare a financial plan that will help you prepare for the unexpected. Your SF Wealth Financial Adviser can let you know how much you should put aside for these ongoing costs and how you can make the most of your cashflow as a property investor. PHASE 1: SELLING If you decide to sell your investment property, you’ll need to consider the tax implications associated with the sale. The most significant of these is Capital Gains Tax (CGT), which is due if you received more from the sale of your property than the amount you paid to purchase the property (capital gain). If the property is new residential property, you may also be liable for GST on the sale. If you co-own the property, the capital gain or loss you make will be adjusted according to the level of ownership you have in the property. If the sale of your property included depreciating assets, such as fittings, fixtures, furniture and accessories, you will need to consider ‘balancing adjustments’ to the total amount of tax you will pay. You may be entitled to a partial exemption from CGT if you owned the property for at least 12 months or it was your main residence for part of the time you owned it. If you place the entire proceeds from the sale of your investment property onto your loan, the interest on this loan will continue to be tax deductible. It is important to keep accurate, detailed records of all income and expenses relating to your investment property, so your accountant and SF Wealth Financial Adviser can help monitor your investment returns and tax obligations. You must keep all records for at least five years, including who owns the property, the dates and costs of buying it, as well as all ongoing rental income and expenses. Tax regulations on investment properties are highly complex, so it’s best to get professional advice before you buy, so you can avoid costly mistakes down the track. This information is general in nature and does not take into consideration your personal circumstances. Talk to your SF Wealth financial adviser for property investment advice that’s right for you.
