Whether it’s a condo in Melbourne or a luxurious mansion in Queensland, any magnitude of investment should be carried out with proper planning and due diligence.
One of the most important aspects of investing in real estate is tax reduction planning. Whoever owns any property, be it an investment or a house you’re staying in, is liable to pay many types of unavoidable taxes for it. Where some taxes are unavoidable, there are a few which you can legally avoid.
Hard to believe, right? But it’s true! So, let’s break this topic down to understand more properly as to which taxes you can avoid paying well within the legal bounds.
– Stamp Duty:
The amount of stamp duty you are required to pay is going to vary from one state to another. Some states have highest stamp duties, whereas some states have relatively low stamp duties. You can reduce the amount of the stamp duty if you buy a property in a state that has lower stamp duty. You’ll have to do a bit of a research on which states have low stamp duties yet higher returns, or better yet, you can connect with our consultancy and research team!
– Income Tax:
Select the right type of property for investments, because it will greatly determine if you can reduce the income tax you will have to pay or not. Buying four or five good quality properties can entitle you to reductions in your assessable income. By this you can possibly reduce the amount of income tax you pay from 37.5% to only 5%. These are ballpark figures, and a property tax consultant will be able to help you best with it.
– Land Tax:
Every state and territory has land tax on any land other than the primary place of residence you own. Just stamp duty, land taxes also vary from one state to another. To avoid land tax, when investing, you should invest in smaller houses which have less land value in areas where the chances of land value increasing are low.
– Capital Gains Tax:
If you want to avoid paying capital gains tax, you should not sell your property for a considerable amount of time. This way, you will be able to avoid paying a huge amount of capital gains tax. To understand this better, check our blog ‘Understanding Capital Gains Tax’ – https://successavenue.com.au/understanding-capital-gains-tax/
As exciting and lucrative as it sounds, avoiding taxes legally, a huge amount of research and time goes into figuring out how and where you can do so. Connect with our tax consultants and researchers and get all the help and advice you need in saving up extra dollars on taxes!
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