Tax Saving Option

Morning All. What are the best options to minimize tax? Investment property is definitely the only option I have heard but how much I can get tax rebate in investment property (say $300K unit/house)?


  • +6

    What does your financial advisor recommend?

    • +8

      they said to ask OzBargain first…

      • +2

        What any quality, high cost advisor would say.

    • they did ask??

    • +1

      This type of generic financial Q is one I find mskeggs' general financial information extremely useful and relevant as answers. Just open this link(forum search), open each post and look up the user name mskeggs on the page.

      Of course, if OP has specific financial situation to minimise tax (e.g. on a pension, doesn't want to pay Medicare levy but has a lot of asset, multi layer business, and investment bonds in the name of his/her partner and grandchildren), then I would suggest OP getting free licensed financial advice.

    • +3

      Maybe the OP is financial advisor and asking for a client.

  • +14

    Easiest way to save tax is to donate your income to a registered Australian charity.

  • +14

    Earn less….
    It's simple maths :)

  • +6

    Member Since
    24 min ago

    Move to another country where more favourable tax concessions are available.

  • +4

    Become rich and buy 'fine art'

    then bid pushing up cost of items from a particular collection. That particular collection is owned by you so your own collection increases insanely after bidding one an item and deliberately pushing the price sky high. Then to answer your question, the bidded item is then 'donated' to a museum and thus is a tax deduction. :)

    • Why didn't I think of that?

      • well i don't have a child to construct these fine paintings. ah.

  • Investment property history get high deductions due to interest being greater than income. But with sub 3% interest rates common, you would be getting positive gearing if you rent it out. At least break even. So not huge tax savings anymore.

    • Not necessarily. Depreciation is still a big factor, and the rent to cost ratio matters a lot. The lower interest rate has made little difference to the investment property we own in terms of negative gearing.

  • +1

    There, reduce you income to tax threshold of $18,200.

    Easiest way is to work less or ask for wages/salary reduction! 😁

  • Tax saving can never be objectively quantified based on the value of your spending. Using OP’s example a $300k investment property maybe generate tax savings for someone, (1) generating net rental losses whilst having (2) other earnings to offset against. Could be a different outcome for another person. To know “ how much I can get tax rebate in investment property” you need to know the values of (1) and (2). Or you can have a play with some negative gearing calculators you can find. Or speak to an accountant.

    • This.

      300k IP means little compared to having 240k loan accuring interests (expense) which can be tax deduction against tax on rental income during yearly tax return. And that's all within the IP bubble and IIRC can't be used against PAYG income tax, for example. Can't find that specific ATO page talking about it, only this page.

      On sale, the CGT is a different type of tax to minimise through the course of neg gearing. That's when the 300k means a bit isn't it?

  • With all the easing Biden is bound to be doing after four years of trump and a year of covid, maybe you should be buying shares in American companies rather than Australian property. The extra profits will be higher than any tax offset.

  • +1

    Why would you want to pay less tax? You want to pay more tax because if you are, you are earning more money.

    There are really only very specific examples of where tax minimization strategies are truly beneficial to people. Usually those people are very rich and would have advisors helping them to structure things a certain way.

    But if you are buying your first investment property with the primary aim being to minimize tax, you are doing it wrong.

  • +4

    Buy a farm? then claim your 1 Landcruisers, 2 hiluxes, 1 million house on tax. then go on ABC, and complain your farm didn't make any money.
    Build up all those tax credits, hire a few backpackers (try not to sexually harass the female ones pls) then 1 year finally put in some effort and make a ton from a good yield.

    • VGood

  • +1

    Earn less income

    • +2

      Username doesn't checks out.

  • +4

    If you really want to minimise tax you need to become a multi millionaire and pay a good accountant.

    Anything average joe does to minimise tax means lowering income. For the $ you spend on valid expenses you don’t get all of it back. Your expenses need to be related to an investment that will gain value faster than the losses you incur from the expenses. Real estate used to be good, but prices are high and future increases may not reflect historic increases.

  • +1
    1. salary sacrifice into superannuation.

    2. Get a margin loan, buy shares.

    3. Earn less

      1. has been a no-brainer for me for the last 15 years. Always topping up to the 25k annual limit. It's not a full deduction as you still pay 15% contributions tax but a great option for those on higher tax brackets.
  • not sure how you get a rebate on property other than just the negative gearing benefits. it may be better to look at your total portfolio and then possibly make extra super contributions to the annual limits as they will be taxed better in an industry fund, eg host+ and you can invest there at better rates. hard to find such unconflicted advisers as their advice might favour themselves. advisers who are qualified without formal study over years [the old guard] may be worse than DIY. you need to learn about super, investment, trading, and then asset allocation and risk return to be an educated consumer and not make ad hoc decisions based on random ozB advice at one point in time.

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