Your townhouse investment will be profitable over time if values increase & you achieve capital growth. In the mean-time, you may be eligible for tax benefits.

DEPRECIATION OF PLANT, EQUIPMENT & BUILDING ALLOWANCE:

If you are buying to rent out your new property, there can be a big benefit in buying new when it comes to tax time. As an investor, you can claim the depreciation, offset against your taxable income and you can normally claim depreciation of plant and equipment. This refers to items within the building such as light fittings, blinds, dishwashers, ovens, carpets etc. Building allowance is related to the construction costs for the building including concrete, bricks, etc. 

After settlement you should organise a schedule of depreciation from one of the professional companies who supply these to landlords.

NEGATIVE GEARING:

When you borrow funds to acquire an investment property and you then off-set the interest and other costs against the income you receive, this is called negative gearing. Gearing helps to make property a good long-term investment by helping to make it affordable to hold your property while it grows in value over time and rents increase. If negative geared you will have tax benefits against your income. 

If you are considering the purchase of a new home or an investment property, the townhouse buyers guide will help you to better understand all the steps to buying off-the-plan, under construction or newly built. The free guide covers the A to Z of buying new and is a must read for all singles, downsizers, families, investors and first home buyers. Click here to request your free copy now.

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