Accounting Tips For Your Investment Property
We met with Cameron from Lawrence Group to gain some investment property tips. If you have any queries, drop us a line at firstname.lastname@example.org or call us at 08 6380 2200 we would love to hear from you.
Kaylee: We’re here with Cameron from Lawrence Group for our final segment in our Investor Series. Cameron, could you tell me if it would depend on individual circumstances if you would recommend someone to positively gear or negatively gear their property?
Cameron: It definitely would. For example, if you’re a high income earner, you wouldn’t want a positively geared property. You’re going to pay tax at the highest rate on that and the same applies in reverse. So, you really should check with your accountant or a tax advisor before you go into it. Otherwise, it’ll cost you a lot of money down the track.
Kaylee: Okay. And in terms of ownership, would you be making recommendations around what name you should be putting the property in?
Cameron: Yeah, again, definitely important to do that from the start. It’s costly to unwind later if it doesn’t suit. And a good example, you don’t generally want your business in the same name as your property. You keep them separate so if one goes bad, at least you retain the other.
Kaylee: Okay. And can you simply explain to me Pay-As-You-Go withholding variations?
Cameron: Yeah. A Pay-As-You-Go withholding variation is done by launching an online form with the ATO. What it does is varies the tax withheld from your salary. For example, if you’ve got a $15,000 rental loss, you only pay tax on the lesser amount of your salary, and it helps with the costs ongoing of the property as well.
Kaylee: There you go. Some advice on how you can get some more money in your back pocket. If you’d like some further information, touch base with myself, we’ll get you in touch with Cameron.