{"id":6175,"date":"2015-10-23T11:22:01","date_gmt":"2015-10-23T00:22:01","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6175"},"modified":"2015-10-23T11:22:01","modified_gmt":"2015-10-23T00:22:01","slug":"compare-the-pair","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/","title":{"rendered":"Compare the pair"},"content":{"rendered":"

Case study: for $35 per week, you could own an investment property too<\/b>
\nOwning an investment property can be far more affordable for potential investors than they think, particularly when they claim all of the tax deductions available to them.
\nTo explain how claiming these deductions can assist an investor to purchase a property, let\u2019s examine the situation of two average Australian taxpayers; Bill who feels he currently is unable to afford an investment property and Kate, who owns one investment property.
\nWhat deductions can be claimed?<\/b>
\nThe Australian Taxation Office allows income producing property owners to claim a number of deductions for expenses involved in holding a property including property management fees, rates, interest, repairs and maintenance.
\nInvestors are also entitled to a non-cash deduction for the wear and tear which has occurred on the structure of the building and the assets contained within the property over time. This deduction is known as property depreciation.
\nBill and Kate\u2019s scenario<\/b>
\nBill currently does not own an investment property though he would like to. He believes the cost of owning an investment property is not within his current budget.
\nFrom his $85,000 salary, he pays $20,707 in taxes after he claims basic expenses such as a clothing allowance, donations and general accounting fees.
\nKate earns the exact same salary of $85,000. However, she saved a deposit and purchased a three bedroom rental property for $600,000 just over one year ago. Her property is rented at $545 per week, a total rental income of $28,340 per annum. The income earned from Kate\u2019s investment property is also taxable, therefore her total combined income equals $113,340.
\nIn addition to the same basic expenses Bill claimed, Kate is able to claim deductions for expenses involved in holding the property, including management fees, insurance, rates, interest, repairs and maintenance. These expenses for a typical three bedroom property would amount to around $39,067. Kate also spoke with BMT Tax Depreciation and obtained a depreciation schedule which showed she could claim an extra $14,200 in depreciation deductions in the first financial year.
\nThe following table compares the pair and shows their before and after tax situations:<\/b>
\n\"Tab2_PT\"
\nThe depreciation deductions in Kate\u2019s scenario have been calculated using the diminishing value method and are based on the first financial year of ownership. This is a generic example only. Every person\u2019s position is different. BMT are not Accountants or Financial Advisors and recommend that you seek independent advice.<\/i>
\nAs you can see, Bill\u2019s take home income after he pays $20,707 in taxes is $63,293. Although Kate earns the same take home wage and is in a similar financial position to Bill, her income producing property also entitles her to claim a total of $53,267 in deductible expenses including depreciation. This further reduces her taxable income to just $59,073 making her income tax payable $11,814.
\nBy maximising the deductions she can claim due to holding her property and claiming depreciation, Kate\u2019s take home income is only a difference of $1,834 per year. Therefore, her property is costing $35 per week to own after tax.
\nInvestors thinking of purchasing a property should always obtain expert advice from a Specialist Quantity Surveyor on the depreciation deductions that will be available to them once they purchase a property.
\nThis article is not intended to provide financial or taxation advice and should not be relied upon for that purpose.\u00a0 Investors should speak with their Financial Advisor and an Accountant to get a complete before and after picture of their individual tax situation based on their individual circumstances.
\nThis article originally appeared online at www.bmtqs.com.au\/maverick\/mav-38-compare-the-pair<\/a>
\n<\/b>Article provided by BMT Tax Depreciation. <\/b>
\n<\/b>Bradley Beer<\/b> (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT <\/b>Tax Depreciation.
\nPlease contact 1300 728 726 or visit\u00a0www.bmtqs.com.au<\/a> for an Australia wide service.<\/b>
\nThe depreciation deductions in Kate\u2019s scenario have been calculated using the diminishing value method and are based on the first financial year of ownership. This is a generic example only. Every person\u2019s position is different. BMT are not Accountants or Financial Advisors and recommend that you seek independent advice.<\/i>
\nAs you can see, Bill\u2019s take home income after he pays $20,707 in taxes is $63,293. Although Kate earns the same take home wage and is in a similar financial position to Bill, her income producing property also entitles her to claim a total of $53,267 in deductible expenses including depreciation. This further reduces her taxable income to just $59,073 making her income tax payable $11,814.
\nBy maximising the deductions she can claim due to holding her property and claiming depreciation, Kate\u2019s take home income is only a difference of $1,834 per year. Therefore, her property is costing $35 per week to own after tax.
\nInvestors thinking of purchasing a property should always obtain expert advice from a Specialist Quantity Surveyor on the depreciation deductions that will be available to them once they purchase a property.
\nThis article is not intended to provide financial or taxation advice and should not be relied upon for that purpose.\u00a0 Investors should speak with their Financial Advisor and an Accountant to get a complete before and after picture of their individual tax situation based on their individual circumstances.
\nThis article originally appeared online at www.bmtqs.com.au\/maverick\/mav-38-compare-the-pair<\/a>
\n<\/b>Article provided by BMT Tax Depreciation. <\/b>
\n<\/b>Bradley Beer<\/b> (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT <\/b>Tax Depreciation.
\nPlease contact 1300 728 726 or visit\u00a0www.bmtqs.com.au<\/a> for an Australia wide service.<\/b>
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

Case study: for $35 per week, you could own an investment property too Owning an investment property can be far more affordable for potential investors than they think, particularly when they claim all of the tax deductions available to them. To explain how claiming these…<\/p>\n","protected":false},"author":176692471,"featured_media":6179,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[5,25],"tags":[70],"class_list":["post-6175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bmt","category-sponsored-channels","tag-featured"],"yoast_head":"\nCompare the pair - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Compare the pair - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Case study: for $35 per week, you could own an investment property too Owning an investment property can be far more affordable for potential investors than they think, particularly when they claim all of the tax deductions available to them. To explain how claiming these...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2015-10-23T00:22:01+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"Compare the pair\",\"datePublished\":\"2015-10-23T00:22:01+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/\"},\"wordCount\":911,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"Featured\"],\"articleSection\":[\"BMT\",\"Sponsored Channels\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/\",\"name\":\"Compare the pair - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2015-10-23T00:22:01+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/compare-the-pair\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Compare the pair\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. Anywhere, Anytime.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\",\"name\":\"rolanrush\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"caption\":\"rolanrush\"},\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/author\\\/rolanrush\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Compare the pair - Realty Talk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/","og_locale":"en_US","og_type":"article","og_title":"Compare the pair - Realty Talk","og_description":"Case study: for $35 per week, you could own an investment property too Owning an investment property can be far more affordable for potential investors than they think, particularly when they claim all of the tax deductions available to them. To explain how claiming these...","og_url":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/","og_site_name":"Realty Talk","article_published_time":"2015-10-23T00:22:01+00:00","author":"rolanrush","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rolanrush","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#article","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/"},"author":{"name":"rolanrush","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"headline":"Compare the pair","datePublished":"2015-10-23T00:22:01+00:00","mainEntityOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/"},"wordCount":911,"commentCount":0,"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#primaryimage"},"thumbnailUrl":"","keywords":["Featured"],"articleSection":["BMT","Sponsored Channels"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/","url":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/","name":"Compare the pair - Realty Talk","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#primaryimage"},"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#primaryimage"},"thumbnailUrl":"","datePublished":"2015-10-23T00:22:01+00:00","author":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"breadcrumb":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/channels.realty.com.au\/realtytalk\/compare-the-pair\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/channels.realty.com.au\/realtytalk\/"},{"@type":"ListItem","position":2,"name":"Compare the pair"}]},{"@type":"WebSite","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website","url":"https:\/\/channels.realty.com.au\/realtytalk\/","name":"Realty Talk","description":"Your Trusted Voice For Property Investing. Anywhere, Anytime.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/channels.realty.com.au\/realtytalk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d","name":"rolanrush","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","caption":"rolanrush"},"url":"https:\/\/channels.realty.com.au\/realtytalk\/author\/rolanrush\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/6175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/users\/176692471"}],"replies":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/comments?post=6175"}],"version-history":[{"count":0,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/6175\/revisions"}],"wp:attachment":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/media?parent=6175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/categories?post=6175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/tags?post=6175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}